Client moving from nonERISA owner only plan to ERISA plan

[AKconsult]

We have a new client that currently has an owner only plan with a large vendor. He is the only participant. He uses the vendor's document. He is getting ready to hire an employee, so he retained us as his TPA. My initial thought is that I would restate the current plan onto our prototype. However, the vendor is taking the position that he has a brand new plan, and they are setting up a new account. I told the client that he should move money from the existing account into the new account and we will continue on with the same plan. But now I am second guessing myself. Can a plan transition from being a nonERISA owner only plan to an ERISA plan and be the same plan?

[TPAMan]

The code and regs certainly allow such a transition. The client's plan doc and/or the vendor contract may have incorporated wording which could disprupt the transition and require restatements or new accounts, but only because those are the policies and provisions the providers have chosen to include.

[Bird]

Yes, it can definitely be the same plan. It wouldn't be the first time a vendor has confused the terms new "account" and new "plan." Sometimes there are magic words that make the confusion go away; with Fidelity and I think Vanguard, if you say you want to a open a "non-prototype account" (meaning not their prototype) they will in fact open a new account; otherwise they're geared to write a new plan.