Want a Qualified Plan? Wait One minute!

13 min readJul 7, 2022

Here are some ESSENTIAL items.

It blows most entrepreneur’s minds when they find all of the documents, procedures, and bureaucratic elements that go into starting a qualified plan (401(k) plan, defined benefit plan, etc). Well, this is a very useful guide that should be construed as an ESSENTIAL checklist providing some guidance so your mind is not blown.

First, the entrepreneur has to decide if they want a pre-approved plan, etc. Well, let’s get right into it. Whoa, horsie! This text is partially intended for those “in the know” (CPA, financial planners, attorneys, etc). I teach professional advisors all over the country and the question about qualified plans always seems to come up. Okay, now let right into it…

Pre-Approved Plan Overview

Is a pre-approved plan right for you?

  • Most pre-approved plan document providers will amend the plan to comply with law changes, making it less likely that you’ll miss a plan amendment deadline.
  • The document provider may provide valuable administration services such as sending employee notices and summary plan descriptions and maintaining plan participant records.
  • Costs are usually lower than those with an individually designed plan, which requires you to hire a plan drafter.
  • Consider whether you can accept the limited options of the plan you’re buying. A pre-approved plan can’t be customized like an individually designed plan.

How to select and adopt your pre-approved retirement plan

  1. Provider — Choose a document provider. This is what VastSolutionsGroup.com does.
  2. Plan type — Compare alternatives before choosing a pre-approved plan and make sure you understand the terms of the plans you’re considering. You must follow any set definitions and terms in the plan you choose.
  3. Employer choices — Plans will allow you to select alternative plan provisions, such as when the employee becomes eligible to participate in the plan or employer contribution formulas. If the plan uses an adoption agreement format…