Start a 401k plan

[ombskid]

Is there a deadline for starting a 401(k) plan other than a safe harbor plan?

[Lou S.]

Before the last payroll of the plan year is processed since you need a plan in place before deferrals can be made. You almost always have to use prior year testing and limit HCE deferrals to 5% to pass ADP testing that first year.

[12AX7]

Also anticipate the plan becoming Top Heavy in the first year, if few or no other non-key employees defer.

[ombskid]

Thanks. I thought so, glad to have corroboration.

[Belgarath]

Or, if it is too late to get it established and make any meaningful deferral (a common problem mid-December!) and they want to make a profit sharing contribution, they can always establish the plan and not make the 401(k) portion effective until 1/1/2014.

[Bill Presson]

Or, if it is too late to get it established and make any meaningful deferral (a common problem mid-December!) and they want to make a profit sharing contribution, they can always establish the plan and not make the 401(k) portion effective until 1/1/2014.

We've done it this way numerous times.

[K2retire]

Keep in mind that various service providers have deadlines as well.

[Belgarath]

Deadlines? Whaddaya mean? We all know all you have to do is push a button...

[401 Chaos]

Speaking of those service providers deadlines, if we can get the plan documents signed, the election in place, and then have payroll processed on 12/31 but the custodian cannot have the actual account set up in which the funds are to be remitted for a couple of weeks, is there any way to pull the funds out of payroll and hold them until the account can receive them? (Custodian is unable to receive check for the deferrals and hold that until account is live--insists that all contributions must come in electronically which cannot happen until account is live.) Thanks.

[Mike Preston]

Open a freakin' checking account in the name of the plan/trust and deposit the deferrals. Transfer electronically when you can.

[SwimmingInBowelsOfERISA]

Open a freakin' checking account in the name of the plan/trust and deposit the deferrals. Transfer electronically when you can.

I just posted a question directly related to your response on another thread tonight, though before I read your comment...would you mind looking at "Confused Self-Directed Solo 401k Plan - Trust vs Custodial Account" and give me your thoughts???