Guest Stella P. Posted November 2, 2009 Posted November 2, 2009 I have a husband and wife who each own 100% of their own business. Neither business has any employees and never will. The husband has one corporation and desires an owner only 401 (k) plan for it. The wife has two corporations and she owns 100% of each business. The wife also would like to set up a owner only 401 (k) Plan for both companies. Questions: *Can they each have their own owner only 401 (k) Plans? *Is the wife's ownership with the two corporations considered a control group? If so, can she still have a owner only 401 (k) plan and file a 5500 EZ or does she have to file a 5500 because of the control group situation. There are no employees and never will be. If the plan has to file a 5500 because of the control group status, does this also mean that the corporations will be subject to ERISA guidelines or will the plan continue to operate as a owner only plan with the exception of the 5500 filing instead of the 5500 EZ. Thank you.
david rigby Posted November 2, 2009 Posted November 2, 2009 One prior discussion that may be relevant: http://benefitslink.com/boards/index.php?showtopic=39019 (There are probably others.) I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.
Guest Sieve Posted November 2, 2009 Posted November 2, 2009 Wife's 2 businesses clearly are a controlled group, so she cannot file an EZ. If husband's business is in a controlled group with one of wife's business (using the rules in the link provided in the prior post), then 5500-EZ filing is not available for him, either. But, that doesn't make his plan (or her plan) otherwise are subject to ERISA if there are no common-law employees.
Guest Stella P. Posted November 2, 2009 Posted November 2, 2009 Thank you for your information. I will set up two plans one for each spouse, the wife's showing the two corporations as a control group. Regarding the filing of the 5500 EZ I thought I had seen somewhere where the 2009 5500 EZ had a change regarding the control group situation. What I thought I read was that in this type of a situation (owner only, no employees, control group) that you could file a 5500EZ under the new EFAST rules. Did any one else read this or did I just make it up. I can't find where I read it and it is driving me crazy. Thanks again.
Guest Sieve Posted November 2, 2009 Posted November 2, 2009 You might be thinking of the e-fast Form 5500-SF, which is a very short form that a one-participant plan can file (if not eligible for the -EZ). See http://www.dol.gov/ebsa/regs/fedreg/notices/20071116.pdf
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