There’s a lot in your Solo 401k plan documents. This article will go over the purpose and use of each document and what you’ll find in your Solo 401k.

Remember, there’s a lot in your documents and Nabers Services is your document provider which means we work behind the scenes to keep your plan documents up to date in the eyes of the IRS. If you have questions on the ‘ins’ and ‘outs’ of your documents, or how to use them compliantly, please consult your CPA and/or tax advisor as Nabers Services is prohibited from giving tax, legal or investment advice. The breakdown of your plan documents in this article is for educational purposes only.

  • Spousal Participation: Explanation of how your spouse can participate in your Solo 401k (and not be disqualified if (s)he is an employee)

  • Adoption Agreement: Your adoption agreement is like an Operating Agreement for your Solo 401k. The Adoption Agreement adopts your 401k (a qualified retirement plan) and lays out the terms and stipulations of how the 401k plan is adopted by your adopting employer (your business).

  • Trust Document: Your Trust Document is your defined contributions trust agreement. This document discusses your rights, powers and duties as Trustee, how to administer trust assets as well as how to amend or terminate your Trust.

  • Appointment of Trustee: Your Adoption Agreement appoints the owner of the business (you) as the Trustee of your Solo 401k. Print and sign this page and keep it in a safe place with your plan documents.

  • Action by Board of Directors: This is the resolution of the adopting employer (usually your business) wherein you decide to use the Solo 401k plan in your business. This document also discusses how the board of directors of the adopting employer understand the contribution limits of your Solo 401k plan as well as formalizing appointing the owner of the entity as the trustee.

  • Plan Document: Your plan document is a Prototype Defined Contribution Basic Plan 01. This document lays out the rules and guidelines of your Solo 401k including (but not limited to) definition of terms, contributions, distributions, vesting, accounting, fiduciaries, and beneficiaries. This 129 page document is the meat and potatoes of your Solo 401k plan.

  • Beneficiary Designation: Like setting up any trust, you’ll need to designate beneficiaries in the case of your passing. 401k plans (like other trusts) will require a primary and contingent beneficiary. People typically nominate their children or other family members as beneficiaries after their spouse. If you are not designating your spouse as a beneficiary, there’s a special form to fill out that your spouse will need to sign. Since this deals with estate planning, it is strongly recommended that you check with your estate planner, legal counsel and/or CPA before filling out the beneficiary designation form.

  • Opinion Letter: This letter direct from the IRS affirms that your Solo 401k is a qualified retirement plan. Keep this letter in a safe place with your plan documents and this letter may be requested if/when you rollover funds into your Solo 401k.

  • Participant Loan Procedure: Your Solo 401k allows for a you to take a loan from your 401k for any purpose. You can use the funds as a personal line of credit to invest in your business, purchase real estate or any other investment transaction. In the participant loan procedure documents, you’ll sign your statement of understanding about the application procedure, limitations, interest and repayment terms. Of course, it’s always a good idea to consult your legal counsel and/or CPA before taking a loan and doing investments.

  • Summary Plan Description: This document is a summary of your rights and benefits under the plan. You’ll also have the general information about the plan, and some information about contributions, participation, vesting, loan procedures and distributions. This is a great document to familiarize yourself so you have a basic understanding of the workings of your Solo 401k plan.

  • Various amendments: Often the IRS contacts us with amendments to your plan, usually as a result of new laws and regulations in Washington. Your plan documents will always be kept up to date and any relevant/new amendments will be listed in your Solo 401k plan documents for easy access should you ever need them handy.

  • Roth Conversion: this amendment allows for in-plan Roth conversions as well as Roth sub-accounts for your Solo 401k.

Please note: Nabers Services is your IRS Plan Provider - we do not provide tax, legal or investment advice. Solo 401k plan documents are provisioned correctly as is, even if certain checkboxes are ticked or left blank. Dates in plan and provisions have been specifically tailored to allow as much flexibility as possible within IRS compliance.

For questions on interpreting your plan documents, please reach out to your legal counsel

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