SIMPLE 401(k) to Traditional 401(k)

[Christopher]

Hello everyone,

A client has an existing SIMPLE 401(k) plan and wants to switch to a traditional 401(k) plan. My understanding is that because a traditional 401(k) is considered to be a successor plan (a.k.a. alternative defined contribution plan) under 401(k)(10)(A), the deferrals from the SIMPLE 401(k) cannot be distributed when switching to a traditional 401(k). I appreciate your input. Thank you.

Christopher Wilson 

[Bird]

I haven't handled or even seen a SIMPLE 401(k), ever.  Looked at it way back and decided there was no point and never paid much attention.  So I may be ignorant, but I think you are talking about restating a plan and changing provisions, in which case, no, deferrals cannot be distributed.

(Found an old thread from 2010, similar Q, similar answer...from me.  No other comments.  FWIW)

[ETA Consulting LLC]

All you have to do is redesign the plan out of the Simple 401(k) provisions.  It's the same plan.

Good Luck!

[JackS]

You can restate the existing plan or set up a new plan and then merge them (or operate them concurrently).  Either way, you cannot distribute the deferrals.