bluehavana2

Thanks. I did the restatement 5/2022. (Whew!)

I’m confident it was originally written correctly but was not updated 3 years ago (I assume for Secure 2.0?). My interaction with MS has been through my financial advisor, who I don’t believe is very familiar with plan docs. It appears that MS can provide me with the information I require and will be reaching out to work with their retirement specialists to assist me in modifying my plan to something more relevant to my current situation, as well as addressing any changes that should have been made 3 years ago. Update: I did receive the cycle 3 restatement in 5/2022 and successfully submitted update.

Thank you all for your replies. Just to clarify, I’ve had this Safe Harbor plan in place for 5 years. The plan is with Morgan Stanley. I doubt they are as experienced as others but, at the time, my financial advisor assured me that everything was above board. The plan was created through their detailed questionnaire and is a fully compliant plan. My accountant handles the annual 5500s and I review these carefully, as I learn by doing. Originally, I chose this route, as I do my own payroll processing (with accountant filing monthly/quarterly/annual forms) and the TPAs I spoke with at the time did not want to break out payroll from administration. From your input, it sounds like I’m good to go with maintaining this plan with a single participant. I wasn’t sure that the Secure 2.0 requirement for LTPT employees overrode my current plan or if I was grandfathered in but my intention is to shut down the plan in a couple of years so I shouldn’t hit that roadblock. I will reach out to Morgan Stanley in hopes that they are more qualified than I originally thought to answer my questions on all this.

I’ve done some googling and ChatGPT and seem to get conflicting information. My situation is I am a business owner with a self-administered Safe Harbor 401k. There are (were) two participants, myself and a full time employee. My employee has resigned and I’ve hired a part time employee, who will work less than 1000 hours per year, and I may hire a second (similar) part time employee. My current Safe Harbor 401k states that employees with a year of service and working over 1000 hours per year qualifies for the plan. Can I maintain my current plan with a single participant (myself) or do I need to convert to a Solo 401k plan. i prefer to maintain my current plan, if possible, even though I understand the benefits of Solo. If I can’t maintain this, is Solo even an option, as it is unclear if even part time employees may disqualify me. thanks!

Good to know. The way the IRS worded it was confusing (as usual). Thanks!

Yes it does. Also, I believe it's HIGHEST loan balance in the past 12 months. Completed everything today. $10k, just to be safe.

Thank you to those who responded. (Pam Shoup /Gilmore) I attached the relevant referenced from my plan design document to my original post. I believe there is no issue with a second loan. (Gilmore) Combining both loans would total $14k (original $4k + new $10k) so it does remain under the 50% limit for his account. My service provider is Morgan Stanley. When I began this whole 401k journey, I was told it was pretty simple, since it’s just me and one other employee in a Safe Harbor plan. While my Morgan Stanley advisor has been helpful, and the do have a group they ask questions of, I don’t think they have the 401k knowledge/resources of someone like Fidelity or other 401k service providers. I’m thinking option A is safest (as Mr Bagwell suggested) so it doesn’t raise any DOL/ERISA red flags, even though I believe either option is available to me. I remain open to all advise or further information anyone may have. It’s a continuous learning experience!

When an employee obtains a second 401k loan, is this a separate repayment schedule or can the initial loan get paid off and "refinanced" into the new loan? I am the owner of a small business (2 employees, including myself) and am the administrator of our Safe Harbor 401k plan. Hardship withdrawals and In Service Distributions are not allowed under this plan but loans are. My employee obtained a 401k loan about 3 years ago and his remaining loan principal balance owed is about $4000. His current 401k plan value is about $32k (100% vested) so he should be able to obtain loans totaling up to $16k against his plan. He again needs money and needs to tap into his 401k again (I already explained this is unwise). If he needs $10k now, and this is possible (I believe it is), what is my better option? -a) Continue his current payroll deduction (3 more years, $4000 + 5% interest) and create a 2nd loan/payroll deduction (5 years, $10000 +9.25% interest) -b) Create a new loan/payroll deduction combining both loans (5 years, $14000 + 9.25% interest) and distribute $10000 to him, effectively paying off the 1st loan. -c) Something I haven't thought of Looking back, I wish I had known that being the administrator of our plan could get complicated. More work than I expected but I've sure learned a lot! Thanks in advance for any input or insight!!!