PATA Pension Administration and Trust Accounting

The SOLO 401(k)

The Solo plan is a great plan for individuals who do not employ any employees and don't expect to having any in the foreseeable future.  It's easy to setup, inexpensive to operate and maintain, and allows the plan sponsor the best way to save for their retirement.

Thanks to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) small businesses (whose only employee is the owner) can open and contribute to a self-employed 401K plan.  Finally, a great tax break strictly geared to benefit the smallest business owners!  On top of the tax break, the self-employed 401K offers other benefits for small business owners. 

We are in the business of establishing and maintaining retirement plans, have been since 1983.  The Solo plan is a straightforward plan for the individual who has no eligible employees besides his/herself.  It allows for larger annual retirement plan contributions than the SEP or traditional profit sharing plan.   It is in our eyes a great plan for the owner only business.  

SOLO 401K plan features

  • Loans are allowed… up to $50,000 or 50% of your vested balance
  • Accepts Rollovers… Consolidate your retirement funds into one plan, rollover investments from other plans and IRAs 
  • Contribution flexibility… You decide what to contribute each year, if anything!! A 401k plan is a profit sharing plan.  Profit sharing plans do not have a mandatory contribution requirement.  You can contribute anything from 0% to 25% of your compensation.
  • Deferral deadline...  Deferrals must be deposited prior to December 31.
  • Employer contribution deadline.... The maximum 25% employer contribution must be deposited prior to filing the business’ tax return.
  • No annual filing requirement... If  the total plan assets are less than $250,000 (including contributions that may be receivable at year end) then the IRS gives you a "BYE" with regarding to filing the necessary form 5500 and schedules
  • Investments… Many plan sponsors are using us to establish a Solo plan because it is possible to use any investment option available…  Vanguard, American Funds, Schwab, Merrill Lynch etc.   With our document you can invest in pension suitable investments on your own or use your existing personal financial planner.  The document that we use has no affiliation with any investment firm allowing the plan sponsor to invest the plan’s assets wherever s/he feels fit.
  • Inexpensive to establish and maintain… Because we are not affiliated with any fund family or investment house, there is a fee to establish a Solo401k plan (not that a large mutual fund will not charge a setup fee).  The fee is a one-time fee and is more often than not less expensive than other plans out there.  Once the plan is established there is an annual document fee that keeps the plan in compliance with the tax code pertaining to retirement plans. 

The Document

The Plan Document that we use is an IRS approved Volume Submitter (prototype format) document.  An approved  document has been reviewed by the IRS and determined to be compliant with the IRS code governing pension plans.  The benefit of the document we use is that if the IRS decides to amend the IRS code governing pension plans, your plan will automatically be covered!   For this service, there is an annual document usage fee of $150/year.  It is a fee to maintain the plan's document on our system.  Unless you have an annual administration performed that $150 fee would be all it will cost to maintain your plan from year to year! 

How to Establish a Solo with us?

To establish a Solo for a one-time low cost setup fee of $350*, click on the “Solo Application” button above, complete the forms, and submit.  That’s it!  Your application will be processed and your plan documents will be returned to you via email in pdf format within 24-48  hours (usually the same day).