Oh no! Some more SIMPLE-401(k) questions

[Moe Howard]

1. Is a Simple-401(k) plan a qualified plan?

(I thought that a qualified plan had to be either a defined benefit plan or a defined contribution plan. A Simple-401(k) plan is neither ...right ??)

2. Do the Simple-401(k) plan assets have to be held in a trust ?

3. Does a Simple-401(k) have to have a plan document, adoption agreement, and determination letter ?

4. It's my understanding that a Simple-401(k) that has participants other than the employer/owner must file a Form 5500.

5. Can a Form 5304-Simple or Form 5305-Simple be used to set up a Simple-401(k) plan ?

6. Do participants have to be given a Summary Plan Description?

7. In order to terminate a Simple-401(k) plan, must all the regular termination steps involved in terminating a qualified plan be followed .... or can the employer simply tell the participants that the plan has terminated and then disburse all the account balances ?

Oh my, that was a lot of questions. I'm tired.

[Gary Lesser]

1. Is a Simple-401(k) plan a qualified plan?

Yes

2. Do the Simple-401(k) plan assets have to be held in a trust ?

Yes.

3. Does a Simple-401(k) have to have a plan document, adoption agreement, and determination letter ?

The determination letter is optional. A plan, trust, SPD is required.

4. It's my understanding that a Simple-401(k) that has participants other than the employer/owner must file a Form 5500.

All corporations (and partnerships and sole proprietorships with non-spouse-owner employees) must generally file.

5. Can a Form 5304-Simple or Form 5305-Simple be used to set up a Simple-401(k) plan ?

No.

6. Do participants have to be given a Summary Plan Description?

Yes.

7. In order to terminate a Simple-401(k) plan, must all the regular termination steps involved in terminating a qualified plan be followed .... or can the employer simply tell the participants that the plan has terminated and then disburse all the account balances ?

Formal termination is required.