RatherBeGolfing

While Vanguard and Fidelity are reputable companies, their plan documents are only as good and effective as the person who uses them. You might look at their "solo-k" adoption agreements and think that it is very simple and just a few options to pick from. But have you read and do you understand the base plan document that is the bulk of the governing document for the plan? The BPD is where the plans spell out how they comply with all the applicable laws and what the plan's default positions are. For example, the adoption agreement might let include or exclude a few items from compensation, but the BPD spells out 10 items that are included or excluded by default, and you wouldn't know what they are by looking at the adoption agreement. The adoption agreement is simply a tool that adjusts the BPD on a few points where it is flexible. You know that you can contribute 25% as an employer contribution, that is great. Do you know what is included in the compensation that is used to calculate the 25%? Not knowing or assuming that something is either included or excluded can cause you to either contribute in excess of 25% which is problem, or not contributing enough and shorting yourself. These are just a few examples of where it is really easy make a mistake, but also easy to prevent one if you know what you are doing. Like others on this board, I make good money cleaning up simple plans like this after they have been screwed up. I make very little money on the one participant plans that I actually service, but it is easy for me to keep them in line since I work with the legal framework that applies to them everyday. Ultimately, it is up to you whether you try to do it yourself with the "free" template you get from an investment house or seek professional assistance. You can probably even find a practitioner who will go along with using the investment house document over their own document, and only charge you for their time in designing the plan according to your wishes and keeping it up to date. Likewise, you can probably find someone who will only charge a few hundred each year to help you calculate your contributions, make sure they are deposited timely, other administrative issues, and government reporting that can make for an easy trap for the non-practitioner. Good luck!

Yes. Balances allocated as of 2015 count towards TH determination for 2016. The late contribution is a separate issue.

A solo 401(k) is just a marketing term for a one participant 401(k) plan. There is nothing in the regulations that require you to have a special plan for a one participant plan or even to close it down when you hire employees. Some firms add this to their documents because they either cannot or do not want to handle a plan with employees due to the testing and non-discrimination requirements. Do yourself a favor and establish your plan with a professional who will talk to you about plan design and how you think your business will grow. A professional will take this into consideration and design a plan that will accomplish what you need it to do right now and at the same time not cause problems if and when you hire employees. You may be able to save some money with the "do it yourself solo 401(k)" offered by some financial institutions, but in the long run, you will be better off with professional advice.

Happy to help

My emphasis. They also discuss money market vs. stable value fund (as a capital preservation option) earlier in the complaint.

Is that the only change? It is adding a new contribution, I would do a new SHN. Is the sponsor large enough where a supplemental SHN would be costly or time consuming?

I'll re-read the complaint this evening, but as I remember it, the claim was that it was imprudent to select a money market fund for capital preservation because a stable value fund could reasonably be expected to outperform a money market fund. That would put both in the same category but claim that it was imprudent to select one over the other. The judge of course disagreed.

But as we have seen over and over in these cases, large sponsors still manage to not follow its own well written IPSs, to the point where you sometimes wonder if they even tried...

As I recall, one of the claims in the Chevron case was that they included a money market fund with modest earnings rather than a stable value fund. I think that claim was based on expected and actual investment performance rather than self dealing or expenses. The claim was dismissed, but it is the closest I can think of that fits your question.

I agree with Tom. The term "may" in this context means you rely on the ADP test result that excludes the improperly excluded employee, even though you would normally have to include any eligible employee in that test. It also says that you have to correct ADP and ACP test failures before you apply the correction for the improperly excluded employee. So you get to exclude the $0 deferral and match for the improperly excluded employee from the ADP/ACP tests, but you do not get to rerun the tests after you allocate a QNEC for that failure.

I will second what ESOP said. Clear questions with as much fact and little emotion as possible will get the most accurate answers. Things like whether you were full time or part time will be important, and any plan related information you can get will be very helpful.

Agree to disagree. Some of my most enlightened and caring clients realize that their plan is probably the only savings their employees will have in addition to SS, so they limit withdrawals to death, disability, and termination of employment.

Congrats Mike!

I'll take the road where many of my plans do not include ANY loans.

Yea I see more plans (and platforms FWIW) that will not allow loans to be rolled over than plans that will accept loans. It probably would have been nice to at least get the opportunity to pay it off with with outside money rather than trigger a taxable event and a 10% penalty though...

The end result would be the same as an offset. Both taxable and subject to the 10% penalty

Hi Angie, It sounds like what happened here is what is known as a loan offset. The loan has been repaid by a reduction of your vested account balance. This offset is treated like an actual distribution from your account, which means that it is included in your gross income. If you take a distribution prior to attaining age 59 1/2, a 10% penalty may apply for an "early distribution". Since the offset is treated as a distribution, and you are not yet 59 1/2 (my assumption based on the original post), you owe a 10% penalty on the offset amount. I hope that helps.

I have plenty of pooled plans in the 25-30 participant range. Investment committee is normally the owner(s) who in turn gets an investment adviser to handle the investments. I never recommend that an owner to actually make the investment decisions, but they do pick the investment adviser. One of the goals (or at least my goals) is to get participants and owners as far away from making investment decisions as possible.

No, you will be fine. If you file it without marking it as the initial return they will come knocking for sure though...

The plan has to have an amendment procedure, look at your base plan docuement. I doubt the amendment procedure says that the vendor has to produce it or that it has to be typed. That said, I'm not 100% sure that crossing out an option and signing in the margins of the document is necessarily a valid amendment either. We are even further removed from amendment by resolution that ETA mentions above. I would also look for a new service provider as they are clearly not meeting the needs of the sponsor.

We didn't get any darkness here in Tampa but the temperature drop was noticeable, which was pretty neat. Only 7 years to go for the next one, I think I'm going to stock up on solar eclipse glasses around 2020...

We will only get the partial down here in Florida, but my daughters school decided that today would be a good day for early release so that kids could enjoy the eclipse. She has been geeking out and researching all weekend. As a side note, I wonder if the DOL would object to investing pension assets in solar eclipse glasses... I saw them selling at $400 for a 10 pack on amazon last week which would be one hell of a rate of return for some flimsy cardboard glasses

I agree, employee would have the 6 required months on the rehire date because of service spanning rules, and the next entry date is 7/1/16.

or Turbotax et al...

The self help websites and software haven't exactly gone without controversy. Legalzoom has been challenged in several jurisdictions. As I understand it, the difference between Austin and a self help site is Austin would use a degree of judgment and discretion, whereas the self help sites do not. Giants like legalzoom have been able to defend themselves against the state bars, and in some cases I believe the reached rather large settlements, which would be hard to do for Austin, even though he is an international man of mystery...