For a transfer into your Solo 401k, we strongly encourage you to submit the transfer documents created by your online Solo 401k dashboard. This is true even if your existing custodian or administrator insists on your filling out their forms. You should still submit the Nabers transfer packet so the sending institution has the proper instructions on handling the transfer as well as the documentation proving that the Solo 401k is an IRS-approved qualified plan.
It can be helpful in filling out forms to understand and remember the following about your Solo 401k:
- Most delays and instances of miscommunication can be avoided by reviewing, and adhering to the guidelines in the rollover guide available within your Solo 401k online dashboard.
- The Solo 401k is an eligible employer plan. It is a tax-deferred qualified plan that comes with an IRS opinion later stating its pre-approval.
- Not taxes are due as a result of your rollover or transfer. Rather than doing a taxable distribution of funds to yourself, you are transferring funds to a qualified plan.
- There is a trust that is setup to hold the assets of your Solo 401k plan
- A rollover check should be made payable to the trust
- The trust name (along with most of the information you may need to know about the plan and trust) can be easily found in the first few pages of the “Adoption Agreement” of your plan documents
- Your business is the adopting employer and the administrator of the plan
- The bank at which you have a checking account for your Solo 401k trust is not the administrator, nor does that bank serve as a fiduciary to your retirement account. The bank is only supplying a deposit account for your Solo 401k trust
- Your plan number can also be found on the Adoption Agreement. For Solo 401ks, the plan number is most often “001” since your business as administrator does not have other plans under it the way most traditional restrictive administrators do. No long, complicated plan identification number is needed.
- The signor of the adopting employer (aka owner of the business that adopts the plan / aka you or your spouse) is the certifying party or receiving representative of the rollover or transfer. Remember, your business is technically the administrator meaning that you as the owner are signing as the administrator. The financial institution that provides a bank account for your trust is not the administrator or the receiving party
When receiving a check in the name of your 401k trust by mail, it is recommended that you have the check sent directly to you (at your business address) rather than the bank. Here are a few reasons for this:
- This is the plan address on the 401k documents that prove the 401k is an eligible employer plan.
- You can then stay proactive about receiving the check directly and know once this is accomplished. Once you receive the check, you can then forward it to the bank to be deposited along with the signed bank account documents to open the account (if not already done. Most clients send the check and bank docs at the same time).
- Receipt of the check by the administrator (you) avoids confusion on the part of the sending institution that typically leads to the institution expecting fiduciary responsibilities of the bank (which has none and is just providing a deposit account).