Restating solo 401k every six years

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JBTX
Posts: 11228
Joined: Wed Jul 26, 2017 12:46 pm

Restating solo 401k every six years

Post by JBTX »

I have heard and read solo 401ks must be restated every six years. What does that mean? What do i have to do?

I have Vanguard solo 401k.
J295
Posts: 3403
Joined: Sun Jan 01, 2012 10:40 pm

Re: Restating solo 401k every six years

Post by J295 »

I just did a Google search because I had never heard of this. I am at Fidelity and I will just ask them if they restate the plan documents periodically. Perhaps you want to do the same with an inquiry at Vanguard
HomeStretch
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Joined: Thu Dec 27, 2018 2:06 pm

Re: Restating solo 401k every six years

Post by HomeStretch »

I have a Fidelity Solo 401k. I am not sure whether Fidelity will flag this to me when required. My plan to discuss this with Fidelity before the start of year 6. My expectation is that Fidelity will provide an amended and restated plan agreement for me to complete (similar to the initial adoption agreement). It should be straightforward.
Spirit Rider
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Joined: Fri Mar 02, 2007 1:39 pm

Re: Restating solo 401k every six years

Post by Spirit Rider »

The one-participant 401k provider (E-Trade, Fidelity, Schwab, TD Ameritrade and Vanguard) will restate the 401k plan. This involves updating the plan document with any mandatory amendments. For example, the SECURE ACT made several changes affecting 401k plans. There is an amendment window (maybe 3 years???) for incorporating legislative and regulatory changes. If the providers restatement widow falls after the SECURE ACT amendment window. The provider will include those changes and provide you with the new plan document and how to certify the restatement. You then certify that restatement.

P.S. I have had Fidelity for two restatements. I didn't have to contact them. They proactively sent a packet with all the necessary instructions and forms.
Topic Author
JBTX
Posts: 11228
Joined: Wed Jul 26, 2017 12:46 pm

Re: Restating solo 401k every six years

Post by JBTX »

Spirit Rider wrote: Fri Oct 16, 2020 12:43 pm The one-participant 401k provider (E-Trade, Fidelity, Schwab, TD Ameritrade and Vanguard) will restate the 401k plan. This involves updating the plan document with any mandatory amendments. For example, the SECURE ACT made several changes affecting 401k plans. There is an amendment window (maybe 3 years???) for incorporating legislative and regulatory changes. If the providers restatement widow falls after the SECURE ACT amendment window. The provider will include those changes and provide you with the new plan document and how to certify the restatement. You then certify that restatement.

P.S. I have had Fidelity for two restatements. I didn't have to contact them. They proactively sent a packet with all the necessary instructions and forms.
OK that makes sense. A while back a Vanguard retirement specialist mentioned plan would need to be restated at year 6. I was never clear what that meant or what exactly I was supposed to do. Sounds like I probably don't need to do anything.
HomeStretch
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Joined: Thu Dec 27, 2018 2:06 pm

Re: Restating solo 401k every six years

Post by HomeStretch »

Spirit Rider wrote: Fri Oct 16, 2020 12:43 pm P.S. I have had Fidelity for two restatements. I didn't have to contact them. They proactively sent a packet with all the necessary instructions and forms.
Thank you for sharing how this process works/has worked with Fidelity.
sohcahtoa
Posts: 64
Joined: Mon Apr 13, 2020 1:40 am

Re: Restating solo 401k every six years

Post by sohcahtoa »

Bumping this thread with a question. I received paper mail from Vanguard directing me to log on to restate my Solo401k.

Everything appears straightforward except this: "Effective date of this restatement" (The effective date of the restatement is usually the first day of the next plan year. For calendar year plans being updated in 2021, the date would be January 1, 2022.)

My initial plan effective date is in 9/10/2020. Following the parenthetical advise above, I should select January 1, 2022 as the restatement effective date. My question is: If I select 1/1/22, is my plan still current/effective for 2021 and able to receive valid contributions for 2021?
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