The role of the plan trustee: Solo 401k | Individual 401k | Self Directed 401k

A Solo 401k or self-directed 401k must have a named trustee, and all plan assets must be held in a trust. The trustee holds the Solo 401k or Self Directed 401k plan non cash assets (e.g., real estate purchase documents, private investment certificates and forms, promissory notes or trust deed documents, to name a few), and ensures the cash assets are deposited in the Solo 401k’s checking account through the bank.Additional responsibilities assigned to the trustee include managing the plan’s investments, although this function can be delegated by trustee to another individual such as an investment manager, or financial professional. Please refer to the following regulation for more information on this: [ERISA 403(a), 29 U.S. C. 1103 (1974)]

What’s more, the self-directed 401k or Solo 401k plan trustee is usually responsible for processing contributions and investment transactions, disbursing funds or paying fees and expenses of the Solo 401k trust, and filing Form 1099-R (only required if distributions from the Solo 401k are processed or if assets are rolled over to an IRA), and Form 5500 once the Solo 401k reaches $250,000 in value (this value applies to cash and noncash assets combined).

Who can be Trustee QUESTION:

I am looking at opening an account. Who can (or cannot) be the Trustee of the Self Directed Solo 401k Trust Account?


Thanks for your inquiry.  While under the regulations the trustee could theoretically be a wide range of persons, if you are self-employed (with no full-time w-2 employees) and set up a Solo 401k plan it should be you (the business owner) so that you have checkbook control over your retirement funds.


About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>


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