Solo 401K restatement

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Topic Author
hotscot
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Solo 401K restatement

Post by hotscot »

Has anyone ever restated a solo 401K?

My 401K is with Wells Fargo but apparently they don't provide any admin functions that address 5500, or restatement.

I don't know what to do.
Well, I see I can do my 5500-EZ easily enough but how do I do a restatement?
HomeStretch
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Re: Solo 401K restatement

Post by HomeStretch »

Here is a thread about the Fidelity Solo 401k plan restatement (required periodically by the IRS rules) that I recently did. Fidelity has a web page with all the new plan documents and a checklist to guide plan administrators like me through the process.
viewtopic.php?f=1&t=351383

Your plan provider needs to provide the amended and restated plan document to plan sponsors. You as the plan administrator need to adopt the restatement, notify participants and retain a copy of the updated plan document in the plan’s files. It’s a fairly simple process.

The Form 5500-EZ is completely separate. IIRC you have a recent separate thread about this. The mainstream Solo 401k providers don’t provide assistance with this. Although Vanguard and Fidelity’s websites do have a guideline to help completing Form 5500-EZ and do provide an annual plan valuation statement. Form 5500-EZ is the plan administrator’s responsibility. The IRS instructions to Form 5500-EZ may be helpful in preparing it. Chapter 4 (last page) of Publication 560 also explains briefly when Form 5500-EZ must be filed (annually for plans with 12/31 assets of $250k+ and after termination for all plans).
Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

Correct on the 5500 yes, I determined enough info on the 5500 and it looks straightforward.

But I'm stumped with the restatement. (And that I just found out about it at random.)
I called WF and got a very big ???
It seems they do not provide restatement assistance for a Solo. I don't even know if they do it for a regular 401K
I don't know what to do now.
CFM300
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Re: Solo 401K restatement

Post by CFM300 »

My solo 401(k) is with Vanguard. They sent me a notice with easy to follow steps. I don't see how I could have done it myself, since they had to send me the updated and amended plan documents to sign.
Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

I'm seriously considering moving all my assets to Vanguard.
HomeStretch
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Re: Solo 401K restatement

Post by HomeStretch »

hotscot wrote: Sun Sep 12, 2021 12:23 pm …But I'm stumped with the restatement. (And that I just found out about it at random.)
I called WF and got a very big ???
It seems they do not provide restatement assistance for a Solo. I don't even know if they do it for a regular 401K
I don't know what to do now.
How and who notified you that you needed to adopt a restatement to your Solo 401k plan?

The linked thread in my above post has a link to the Fidelity website that will give you an example of what types of documents that your provider (Wells Fargo) should be providing you with. Vanguard was doing the same for its Solo 401k plan per another thread.

If WF isn’t helpful, consider amending your WF plan to a plan offered by another provider such as Fidelity or Vanguard.
jimmyrules712
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Re: Solo 401K restatement

Post by jimmyrules712 »

I recently restated my plan from Fidelity to Vanguard. The process didn't require that I do anything on the outgoing account side. When I applied for the Vanguard account I had to indicate in the application that I was re-stating an existing plan, then provide the plan details, then Vanguard took care of the rest.
Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

[/quote]
How and who notified you that you needed to adopt a restatement to your Solo 401k plan?

If WF isn’t helpful, consider amending your WF plan to a plan offered by another provider such as Fidelity or Vanguard.
[/quote]

No-one notified me, not WF certainly, of anything but I've been reading about the restatement requirements and it seems this a regular thing?
And that the next one needs to be done by July 31st 2022. I just don't have the slightest information regarding if it pertains to me.

'If WF isn’t helpful, consider amending your WF plan to a plan offered by another provider such as Fidelity or Vanguard'

I'm grateful for your feedback but I don't know what amending my WF plan means. I wonder If that simply means transferring my 401K to Vanguard? (I already have other Vanguard accounts.)
Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

jimmyrules712 wrote: Sun Sep 12, 2021 5:21 pm I recently restated my plan from Fidelity to Vanguard. The process didn't require that I do anything on the outgoing account side. When I applied for the Vanguard account I had to indicate in the application that I was re-stating an existing plan, then provide the plan details, then Vanguard took care of the rest.
Jimmy...where did you obtain the plan details? Are you referring to a specific document?
I checked my 401K docs that are archived on my online account. I only seem to have an 'Account Agreement', 66 pages long.
w1337
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Re: Solo 401K restatement

Post by w1337 »

I first had my SoloK with ETrade because they had the most flexible features of all the brokerage SoloKs. I quickly learned that the complexity of the product isn't well supported by brokerages and the employees are often ignorant in significant ways.

I moved my SoloK to My Solo 401k Financial (https://www.mysolo401k.net/) and haven't regretted it once. While I've some additional administrative responsibility, it's incredibly flexible and the company is compromised of experts. They help with the 5500 filing every year but you should know that you can file electronically as well.
HomeStretch
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Re: Solo 401K restatement

Post by HomeStretch »

Perhaps WF is just slower than Vanguard and Fidelity. Your WF plan likely does need to be amended and restated by 7/31/22 (per the IRS cycle) to incorporate changes in the last 6 years.
hotscot wrote: Sun Sep 12, 2021 7:44 pm I'm grateful for your feedback but I don't know what amending my WF plan means. I wonder If that simply means transferring my 401K to Vanguard? (I already have other Vanguard accounts.)
If you want to move your plan to another provider, you amend your plan (rather than adopting a new plan). The new provider’s plan adoption agreement should have a section on this. Then do a direct trustee-to-trustee transfer of the plan assets. The new provider can help you. It’s pretty straightforward.
Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

I established the Solo 401K in Jan 2015. But haven't ever heard a peep on this matter, ever
And none of their customer service staff have a clue what I'm asking about. (I'm in the Twilight Zone.)

I'll try to reach a specialist tomorrow :(
I'll also speak with Vanguard.
ebeb
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Re: Solo 401K restatement

Post by ebeb »

Recently Vanguard sent me a nice packet with the needed forms to sign and just had to sign couple of places and also log in online and submit some info for the solo401k that needs to be restated every 6 years or so. Vanguard makes it pretty painless.
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Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

Long story short...

Took ages getting through the phone tree.
Got through to an agent who checked with Wells Fargo tax dept. (So she says.)

States they've never hear of Form 5500 or the Restatement requirement. :oops:

Looks like Vanguard here I come.
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Artful Dodger
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Re: Solo 401K restatement

Post by Artful Dodger »

hotscot wrote: Mon Sep 13, 2021 1:20 pm Long story short...

Took ages getting through the phone tree.
Got through to an agent who checked with Wells Fargo tax dept. (So she says.)

States they've never hear of Form 5500 or the Restatement requirement. :oops:

Looks like Vanguard here I come.
Hi, I’m the one who asked in your previous post about 5500 form filing if WF had notified you of the restatement requirement.

That’s gross incompetence for them to not know anything about the restatement requirement or the 5500 form filing.

I previously mentioned I had Fidelity and they have been great for compliance issues and admin / investment options, but I expect Vanguard will be fine as well.
Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

Yes, WF are absolutely useless....I'm pulling the trigger on Vanguard.
Even one of their own WF local reps admitted that someone had dropped the ball when they set it up in 2015.
In future I can do my 5500's on my own, although V. will set reminders etc.
Regarding Restatement the Vanguard rep explained that when they do the transfer on to the new plan that will take care of Restatement.
Their fees are $20 a year for each investment, which includes admin, but since I'm moving three accounts with well over 50K, actually at least $1.6M, there will no fees. Praise Jack!

(I'm moving Individual 401K, TIRA, and Roth IRA. I wish some customer exec would contact me so I could explain why I'm transferring but there seems no avenue for that.)
jimmyrules712
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Re: Solo 401K restatement

Post by jimmyrules712 »

hotscot wrote: Sun Sep 12, 2021 7:47 pm
jimmyrules712 wrote: Sun Sep 12, 2021 5:21 pm I recently restated my plan from Fidelity to Vanguard. The process didn't require that I do anything on the outgoing account side. When I applied for the Vanguard account I had to indicate in the application that I was re-stating an existing plan, then provide the plan details, then Vanguard took care of the rest.
Jimmy...where did you obtain the plan details? Are you referring to a specific document?
I checked my 401K docs that are archived on my online account. I only seem to have an 'Account Agreement', 66 pages long.
I was referring to the original solo 401k adoption agreement I signed and submitted to Fidelity when I first opened the plan. I requested a copy of it via secure message and Fidelity sent it the next day. The only important detail I needed from it to re-state the plan to Vanguard was the initial plan effective date,
Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

Yeah I just found out that WF never provided that to me. Confusion reigned.
Retired Bill
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Re: Solo 401K restatement

Post by Retired Bill »

Anytime Congress changes the rules for retirement plans, either the plan will need to be amended or restated. For employer sponsored plans, your employer or their appointed administrator will handle the details. The plan that Fidelity or Vanguard provided you is a prototype plan (fill in the blanks with your business details and elections). It will also need to be restated or amended from time to time whenever Congress changes the law that affects your plan. It is up to you as the plan administration to make sure you follow the terms of the plan as well as prepare and file the annual tax filings. Some tax preparers can help you with that if you don't want to prepare the forms, but they are not difficult. Just need to remember to do them. I'm surprised your tax preparer hasn't asked who is doing the 5500, but you may be doing your own personal returns.

Forget to mention the prototype plans are submitted to the IRS with a healthy fee to get the IRS's approval of the plan. You probably have a copy of that approval in the plan documents. Vanguard or Fidelity paid that fee, and is why they charge you and others in part for the legal work of keeping the plan in compliance with current tax law.
Katietsu
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Re: Solo 401K restatement

Post by Katietsu »

hotscot wrote: Mon Sep 13, 2021 9:27 pm Yeah I just found out that WF never provided that to me. Confusion reigned.
But you must have completed and signed the original adoption agreement. Presumably, you then submitted it to WF. Are you saying that you did not keep a copy? What do you feel you should have received from WF? What did you mean when you said WF dropped the ball in 2015?

Regardless, remember that you are administering your own plan. You are receiving a prototype plan from Vanguard or WF but you are not paying them to run your plan. You need to create or keep your own records including salary deferral agreements, if relevant. There are companies that you can pay tk provide a greater level of service if desired.
Last edited by Katietsu on Mon Sep 13, 2021 10:54 pm, edited 1 time in total.
Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

Retired Bill wrote: Mon Sep 13, 2021 9:42 pm and file the annual tax filings. Some tax preparers can help you with that if you don't want to prepare the forms, but they are not difficult. Just need to remember to do them. I'm surprised your tax preparer hasn't asked who is doing the 5500, but you may be doing your own personal returns.
Yes, I've been doing my own taxes for years but Turbo Tax never mentioned the 5500.

Are you saying that there are annual tax filings required for a 401K? I wasn't aware.... (Unless it's already in my TT filing.)
Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

Katietsu wrote: Mon Sep 13, 2021 10:47 pm
hotscot wrote: Mon Sep 13, 2021 9:27 pm Yeah I just found out that WF never provided that to me. Confusion reigned.
But you must have completed and signed the original adoption agreement. Presumably, you then submitted it to WF. Are you saying that you did not keep a copy? What do you feel you should have received from WF?
I completed an Account Agreement. That's the only document they provided and asked me to sign. I don't know if that's the same thing as an adoption agreement.
Katietsu
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Re: Solo 401K restatement

Post by Katietsu »

hotscot wrote: Mon Sep 13, 2021 10:52 pm
Katietsu wrote: Mon Sep 13, 2021 10:47 pm
hotscot wrote: Mon Sep 13, 2021 9:27 pm Yeah I just found out that WF never provided that to me. Confusion reigned.
But you must have completed and signed the original adoption agreement. Presumably, you then submitted it to WF. Are you saying that you did not keep a copy? What do you feel you should have received from WF?
I completed an Account Agreement. That's the only document they provided and asked me to sign. I don't know if that's the same thing as an adoption agreement.
It probably is all part of the same package. I just looked at the ETrade information. The first page is labeled Application. The 15th page starts with the Adoption Agreement. But it is all presented as one long pdf with places to fill in your personal information and plan choices. You might want to read through your Account Agreement and see if it is similarly arranged.
Katietsu
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Re: Solo 401K restatement

Post by Katietsu »

hotscot wrote: Mon Sep 13, 2021 10:49 pm
Retired Bill wrote: Mon Sep 13, 2021 9:42 pm and file the annual tax filings. Some tax preparers can help you with that if you don't want to prepare the forms, but they are not difficult. Just need to remember to do them. I'm surprised your tax preparer hasn't asked who is doing the 5500, but you may be doing your own personal returns.
Yes, I've been doing my own taxes for years but Turbo Tax never mentioned the 5500.

Are you saying that there are annual tax filings required for a 401K? I wasn't aware.... (Unless it's already in my TT filing.)
Form 5500 is not supported by TurboTax. Form 5500 is the annual required form that may be required for the 401k. You do not need to file until your account balance reaches $250,000 or you are permanently closing the plan. There is a Form 5500-EZ. Are you familiar with these requirements? There are potentially huge penalties if you mess this up.
Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

I am aware of 5500
Easy to do.

And in general the IRS are not so punitive.
Many dealings with them.

But I appreciate your input.
Katietsu
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Re: Solo 401K restatement

Post by Katietsu »

hotscot wrote: Mon Sep 13, 2021 11:45 pm I am aware of 5500
Easy to do.

And in general the IRS are not so punitive.
Many dealings with them.

But I appreciate your input.
Ok. One of your posts seemed like you had this well in hand and the other seemed sort of fuzzy on it.

I agree that the IRS is not the punitive organization of old.

Hope you get your plan transferred to a brokerage with better service. I have heard of instances where instead of transferring and maintaining the same plan, the process got screwed up with new account being opened as a new plan. So I would just watch for that.
Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

5500 is well in hand.
Restatement not so much. and since WF professed to not knowing anything I'm scurrying to catch up.

Vanguard did say my plan would be reset when I transfer...is that a bad thing?
Katietsu
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Re: Solo 401K restatement

Post by Katietsu »

As I am sure you know, when you use the off the shelf i401k from a brokerage, you start with plan documents from them and it becomes your plan documents after you fill in the blanks and check off the boxes. That set of plan documents must be updated to account for the changes in the tax code. So, the restatement is basically taking the new tweaked set of documents from WF or whoever, adding back in the same information as the first time, and attesting that you did it. When you open your new account with Vanguard, the documents that they will give you will be the “new” documents. So, you will be avoiding a restatement process because you will already be using the updated documents during the Vanguard account opening process. I think this might be what Vanguard meant when they said your plan would reset with the transfer.

The last required restatement had an April 2016 date. So it seems that you avoided that restatement in a similar way because your 2015 plan opening was done with a set of documents that had just been through the update/approval process.
Topic Author
hotscot
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Re: Solo 401K restatement

Post by hotscot »

Thank you so much...
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