SIMPLE 401(k)

[Archimage]

From reading Rev Proc 97-9 I get the impression that you could not convert a regular 401(k) plan to a SIMPLE 401(k) mid-year. Would you agree that it can only be done for the beginning of the next calendar year?

[Appleby]

I would agree. The effective date of the amendment would be as of January 1 of the year following the year that the amendment was made. I have seen nothing to the contrary

[R. Butler]

I've somewhat with a similar question that I posted in the 401(k) forum.

If you have a fiscal year 401(k) year end 06/30, can you amend to a SIMPLE 401(k) effective 07/01 or do you have to first have a short year from 07/01 - 12/31 & then amend to SIMPLE 401(k) effective 01/01? I ask because of the exclusive plan rule. Although it is not a new plan, I struggle with the fact I can't simply terminate the 401(k) at 06/30 & start a SIMPLE IRA 07/01, but I would be able to amend to the SIMPLE 401(k) 07/01. I just want to make sure I am not missing something.

Thanks