Please check out this good question from our Daily Live Zoom call. Subscribe to our YouTube Channel to get notifications of our Daily Solo 401k FAQs.
We have a lot of Solo 401k that have a solo 401(k) somewhere else and then they want to convert to our plan because of the features and the services we offer (e.g. Mega Backdoor Roth Solo 401, solo 401k loans, alternative investments, 5500-EZ and 1099-R preparation and submission, etc. as part of the service for no additional charge).
When one is restating a Solo 401k plan, the existing plan is governed by the existing plan documents and then are being replaced with our plan documents which have the features that one is looking for.
To properly draft the plan restatement documents, we need to know the original effective date of that existing plan documents because when we draft the new documents they will relate back to the original plan effective date because the plan is continuing but now simply being governed by a new set of solo 401k plan documents.
As a result, there is no need to do a 5500 EZ just on account of restating the plan. Likewise, there’s no need to do a 1099-R because the existing plan is not being shut down.
Whether or not a 5500 EZ is required is not a function of the plan being restated but rather depends on whether the value of plan assets are more than $250,000.
If one has a Solo 401k plan that has plan assets of greater than $250,000, a Form 5500-EZ needs to be filed regardless of whether the plan provider changes via a restatement.