Single Participant 401(k) Documents

[WDIK]

A recent thread prompted me to pose the following questions for those forum members with experience in dealing with the "individual" or "solo" 401(k) plans.

Are most/any of the plan documents used by those entities marketing individual 401(k) plans worded to explicitly exclude employees other than the owner, or is it more common to simply use a standard 401(k) document for a single participant plan and merely call it a "Solo(k)"? If the former, do they accept adopting employers that have employees other than the owner?

Thanks for any and all feedback.

[Appleby]

All those that I have seen is a very slimmed/trimmed down version of the prototype sponsor’s regular 401(k) plan document. For instance, an 18-page adoption agreement is trimmed to a 2-page adoption agreement for the Individual- (k) plan. The basic plan document is also trimmed. These plans do allow adopting employers with non-owner common law employees to adopt the plan. The employers remain eligible (to adopt the k-plan) as long as the non-owner employees are not eligible to participate in the plan- for instance, if they work less than 1000 hours every year and/or are under age 21.

[Alf]

Most use standard documents, I believe, but if you limit eligibility, you can cut out the ERISA provisions (claims, some loans, etc.) and thngs like cashouts and really shorten the document, but it usually is not worth the work.