Your Solo 401(k) Plan Requires a Language Update by July 31st, 2022.
On a periodic cycle of approximately 5-6 years, all 401(k) retirement plans undergo a “plan restatement”. During this process, the plan document is replaced with a revised version that incorporates any changes to the tax code governing retirement plans since the last cycle.
It is mandatory that all active plans undergo the restatement process. Failure to restate your plan and operate under the current provisions of the tax code can result in severe consequences including the potential of plan disqualification and loss of tax-sheltered status. An expensive process with the IRS is required to remedy an out of compliance plan if you miss the restatement deadline.
The administrative process to complete what is being called the “Cycle 3 Restatement” has been completed and the new plan language has been finalized. We are working to get all of our clients updated with a restated plan to ensure compliance.
We are also using this event to migrate legacy clients with plan documents authored by Draneas, Huglin & Cooper, P.C. to our in house document platform so we can better administer future subscription maintenance.
Frequently Asked Questions
Following are resources we have put together to guide you through this process.
When is the Deadline to Update?
All plans must be restated and executed by the sponsoring employer (you) by July 31st, 2022.
When Will My Plan be Updated?
Our plan is to restate your plan in the anniversary month of initial plan delivery.
We will be reaching out to confirm details about your plan before starting the restatement. Please help us by ensuring we have your current contact information.
Can I Update my Plan Sooner?
If you have a need for updated plan documents, you are welcome to start the process at any time.
What Does the Restatement Cost?
Plan restatements are included in your annual document maintenance subscription of $125 per year.
Delivery of digital documents is free.
Delivery of a physical notebook costs $75 to cover production and shipping expenses.
What Plan Document do I Have?
Plans delivered on or before April 30th, 2019 were provisioned by Draneas, Huglin, & Cooper, P.C. Your plan will need to be restated. A new document maintenance subscription will be required to switch you to the Safeguard document platform.
Plans delivered on or after May 1st, 2019 are on the Safeguard Advisors document platform. Your plan will need to be restated. You should already have an active Safeguard document maintenance subscription.
Plans delivered after December 1st, 2020 are already using the Cycle 3 plan document and do not need to be restated.
What if I am not Using my Solo 401(k) Any Longer?
A formal process is required to shut down a Solo 401(k) plan. Please email email@example.com to let us know you want to shut down your plan. We will send simple to follow instructions to terminate your plan.
Plans must be using the current document version when terminated. If you plan to wind down your plan it will be to your advantage to do so before July 31st, 2022.
I Have Received an Invoice from Draneas, Huglin, & Cooper, P.C. Should I pay it?
Before you pay an invoice please Schedule a Support Callback. We’ll review where you are in your subscription cycle and determine the best time to restate your plan and switch you to our in-house document platform.
What if I Need to Make Changes to my Plan?
We’ll want your restated plan to be current. If you have moved, changed your business structure, or have other updates to consider, please let us know.
How Can I Learn More?
Please email firstname.lastname@example.org to initiate requests. Most questions are asked frequently and we can generally provide a detailed written response promptly. If your question requires, we will have the correct resource on our team reach out to you personally.
For unique matters that require a conversation please Schedule a Support Callback.