Speak with a Broad specialist:
(800) 395-5200Schedule a CallOpen an Account
Speak with a Broad specialist:
(800) 395-5200Schedule a CallOpen an Account

February 14, 2022

Solo 401(K) Annual Compliance FAQs

What does the Annual Compliance fee include?

  • Plan Amendments as required by the IRS
  • Restatement of Plan Documents per IRS regulation (usually every 5 years)
  • Assistance with filing of tax forms 5500-EZ (if required)
  • Guidance regarding investment rules for all forms of alternative investments
  • Guidance on UBIT and UDFI rules
  • Guidance on Disqualified Person and Prohibited Transaction rules
  • Guidance regarding Annual Contributions
  • Assistance in transferring IRAs or other 401ks into your new solo 401k

Do I need to update my Plan?

Yes, you do.  All Qualified Retirement Plans must be updated on a regular basis.  This is because the lawmakers in Washington are constantly changing retirement law.  The Plan Amendments that we send you keep your Solo 401k Plan compliant with the newly revised laws. In addition to these Amendments, every 5 years your Solo 401k Plan will undergo a complete restatement. This revised Plan will also be sent to you. Broad Financial’s Annual Compliance fee covers the cost of Amendment and Restatement processing of your Solo 401k Plan.

Can I update my Plan myself?

Yes, but you will need to hire an ERISA attorney to obtain a list of the changes from the IRS, figure out which paragraphs in your 125-page Plan need to be amended, and then prepare an appropriate amendment. The easier option is to spend a fraction of the cost and let Broad handle it for you.

What happens if I do not pay the fee?

Your Plan will not be updated, and your account with Broad Financial will be closed. 401k plans must be updated to conform to changes in the federal tax laws made by Congress or to reflect official guidance issued by the IRS. This requirement applies to all 401k plans, whether active or not, for as long as assets remain in the plan. Terminating plans must be updated for law changes through the date of termination.
If you didn't adopt a required amendment on a timely basis, you are a late amender or a nonamender, which means your 401k plan doesn't comply with the law and is no longer a tax-favored qualified plan. In this case, the cash and assets of your plan would become fully taxable, which can include excise taxes and tax penalties levied against the plan sponsor.
Source: irs.gov


DISCLAIMER – Broad Financial LLC does not provide legal, tax, or investment advice.


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