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Solo 401k

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  • #31
    I'm setting up my solo 401k through ETrade.

    Do I have to appoint a trustee for the plan? Can it be me? It looks like I have the option not to appoint a trustee because I'm self-employed. If it isn't necessary to appoint one, is there any benefit to doing so?


    • #32
      I would defer to jacoavlu or spiritrider as to whether or not you have to appoint a ttee but yes, you can appoint yourself in this situation.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087


      • #33
        It has nothing to do with fact that you are self-employed. It is because a one-participant 401k plan is not ERISA Title I qualified. As such, it does not require a trustee or a bond. You can leave the section blank or you can name yourself as trustee. I don't know if there is any benefit of one over the other.


        • #34
          The plan documents say something about being self-employed as an exception to ERISA:

          This Plan is exempt from the trust requirements under ERISA section 403 (e.g.,
          the Plan covers one or more self-employed individuals as defined in Code
          section 401(c)(1)).

          So I guess, I'll just move ahead without naming a trustee.

          Thanks for the feedback.


          • #35
            The ERISA trust exemption is for a self-employed 401k ERISA Title I qualified plan. This only applies if the 401k plan has non-owner/spouse employees.

            A one-participant 401k plan is not an ERISA Title I qualified plan to begin with. So it is not subject to ERISA trust or any other requirements regardless whether you are self-employed or own an S/C corporation.

            While you are exempt from trust requirements based on the latter, the bottom line is that you are still exempt.