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Solok plans are popular for one person business plans as they can maximize the benefits of a defined contribution plan ($51,000 in 2013 if under age 50 and $56,500 if over age 50) or defined benefit plan without having to worry about compliance tests or completing the Form 5500 if the plan has assets of $250,000.

At DWC Consultants, we create the plan document for you in less than two days and you are free to pursue the best investment approach for your plan, including:

  • Opening a brokerage account
  • Selecting a recordkeeping platform or mutual fund/insurance provider


Do I qualify for a solok (the Title I exemption)?

Your company qualifies if one of the following ownership scenario's:

  • An individual and his or her spouse who wholly own a business (incorporated or unincorporated)
  • Partners and the partners’ spouses

In addition, the plan must satisify:

  • Satisfies the minimum coverage requirements without being combined with any other plan maintained by the employer;
  • Does not cover a business that is a member of a “controlled group”; and
  • Does not cover a business for which leased employees perform services


When does a solok plan lose its Title I exemption?

When you hire a person that becomes eligible for the plan. We typically write the plan document with an initial amnesty date and then create the eligibility criteria as age 21, one year and 1,000 hours. The plan retains its exemption until the employee enters the plan!


When does a solok have to file a Form 5500?

A plan that meets the Title I exemptions is exempt from filing the Form 5500-EZ for the plan year if the plan had total assets of $250,000.

There are three events when a solok plan has to file a Form 5500:

  • Assets greater than $250,000
  • If the plan filed in the previous year (s) - trust us, if you filed in one year and did not file the next, you will eventually get a notice, hence we recommend once you start filing, that you always file.
  • Final Year of the Plan (formally terminating the plan) - The Form 5500 instructions are clear, you must file a final Form 5500 regardless if you have never filed a Form 5500.


Who calculates the employer contribution, as I want to maximize my company contribution and minimize my compensation?

Solok contribution calculations are typically performed by your CPA. If your plan has more than one participant (a business owner or spouse) and you want us to calculate the profit sharing contribution, simply provide us the dollar amount you want to allocate with the completed attached spreadsheet.

For 2013 calculations, please note the following:

  • The maximum for a participant under age 50 is $51,000.
  • The maximum for a participant over age 50 is $56,500
  • The 404(a) deduction limit is 25% of eligible compensation. Elective deferrals to a 401(k) plan are not included in the deduction limit.
  • The maximum annual addition under 415(c)(1)(A) is the lesser of 100% of compensation or $51,000. This includes elective deferrals under 401(k).

What services does DWC Consultants provide for solok plans other than the plan document and the Form 5500 if required?

Each year, we perform an exemption review to ensure your plan still qualifies for the Title I exemption or to let you know that the plan may lose its exemption in the coming year. If the plan has lost its solok status or will most likely lose it in the next year, we will work with you to ensure you are working with the best fit recordkeeping platform as well as work with you on a plan design front to ensure the plan continues to meet your retirement goals.

To perform this review, we require a complete an accurate census uploaded to our DWC Portal (or simply answer the easy annual questions on our DWC Portal).


The content of this website is general in nature and is for informational purposes only. It should not be used as a substitute for specific tax, legal and/or financial advice that considers all relevant facts and circumstances.