Solo 401(k) termination and incoming rollover to employer plan

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Topic Author
mamster
Posts: 647
Joined: Tue Jan 11, 2011 1:05 pm

Solo 401(k) termination and incoming rollover to employer plan

Post by mamster »

I have a Solo 401(k) with Vanguard that I no longer need to contribute to since I'm now a W-2 employee and expect to stay that way. To simplify and avoid potential compliance headaches, I'd like to roll the money into my current employer's (very good) 401(k) at Fidelity.

I know that I need to terminate the solo 401(k) and submit form 5500-EZ. My question: what happens to the money when the plan is terminated? Can I just have Vanguard cut a check directly to Fidelity? Do I need to use the 60-day rule? Or should I just call Vanguard (or Fidelity?) and ask?
HomeStretch
Posts: 8429
Joined: Thu Dec 27, 2018 3:06 pm

Re: Solo 401(k) termination and incoming rollover to employer plan

Post by HomeStretch »

Call Vanguard to ask what your options are for distributing your plan’s assets due to a possible plan termination. Likely there is a form to complete where you indicate the check payee and provide the mailing address for the check.

Call Fidelity to confirm your plan accepts rollovers in. If yes, ask whether you need to complete a form, how the Vanguard check payee should be made out (FBO, not made out to you directly) and the address where Vanguard or you should mail the check.

A Form 5500-EZ is required to be filed for a plan termination by the end of the 7th calendar month following the plan termination date. You can file online through the EFAST2 system. File soon after terminating and all plan assets have been transferred out as there are stiff penalties for late filings and failing to file.
Topic Author
mamster
Posts: 647
Joined: Tue Jan 11, 2011 1:05 pm

Re: Solo 401(k) termination and incoming rollover to employer plan

Post by mamster »

Exactly what I needed to know, HomeStretch—thank you!
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