Forums Solo 401k Solo 401k Bank Account Bank Signers?

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  • #6109

    Roberta E.
    Participant

    Hi Everyone,

    Happy Friday!

    We are in process of opening the Pre-Tax bank account. This particular account is being opened in only 1 of the 2 Trustees. Per the adoption agreement, there are 2 Trustees under 1 Solo401K plan.

    1) The application is asking: Would you like to add another plan participant?

    To clarify – Even tho the account is in the name of only 1 Trustee. The answer would still be yes because there are 2 Trustees in the overall plan — Is this correct thinking?

    2) The application and/or bank is asking if we want to have more than one person as a signer on the account?

    This is 1 Trustees account. Each Trustee will have their own accounts (pre-tax, roth & after-tax)

    So is it allowable to have both of us on each other’s accounts as signers?

    Or is this against the rules?

    Thank you

    Roberta

  • Bank Signers?

    1 Reply
  • Detra Gilreath

    Top SubjectMega Backdoor Roth Solo 401k,Solo 401k Bank Account
    Top ForumsMega Backdoor Roth Solo 401k, Solo 401k Bank Account

    Detra Gilreath

    Roberta E.

    Top SubjectSolo 401k,Mega Backdoor Roth Solo 401k

    August 6, 2021 at 2:35 pm

    @Roberta

    Roberta E.

    Top SubjectSolo 401k,Mega Backdoor Roth Solo 401k

    Good questions to highlight the distinction between participants and trustees!

    1) Each participant’s Solo 401k funds are kept in separate accounts, so if you only want an account for one person you would answer “No”. If the other participant wishes to have an account for his or her funds, you can answer “Yes” and in that case a separate account will need to be opened under the name & EIN of the Solo 401k for the benefit of such other person.

    Note: (i) The answer does not depend on how many trustees are on the plan; and (ii) if each participant wishes to have multiple types of funds (e.g. Pre-tax, Roth and/or Voluntary After-tax) then separate sub-accounts will need to be opened for each type in the name of the Solo 401k for the benefit of each participant.

    2) Each Trustee has signing authority over the Solo 401k plan and all sub-accounts – this is certainly allowable and in accordance with the rules.

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