HR-10 / Keogh Plans

Submitted by Joseph Arsenault on Thu, 2009-03-19 17:12

Greetings!

I have someone asking me about dormant HR-10 plans that have not been kept up.. I was thinking that they were “qualified plans”, so wouldnt they be subject to Section 401(a) and so forth?

Does anyone have a better understanding of old HR-10 plans and how they could just sit around dormant, and what needs to happen for them to be brought up to code? I am missing something here..

Thanks



Submitted by mk foss on Thu, 2009-03-19 18:04

To continue to be a qualified plan, certain required amendments must be adopted.

You should consult a plan adminstrator to see what can be done. Search for one under “employee benefits” or “third party adminstrators”.



Submitted by Joseph Arsenault on Thu, 2009-03-19 18:28

So does that essentially mean the plans are not subject to audits like 401ks? Because you would think if they are dormant and not keeping up with code to stay qualified that the plans would become dis-qualified..

In short though, a TPA should be brought in to bring the plans up to code if they are not already.



Submitted by mk foss on Thu, 2009-03-19 21:00

The Keogh plans are subject to audit. The audits are normally generated from 5500 filings. That form is supposed to be filed if the plan covers anyone other than the business owner and spouse. When the owner and spouse are the only ones covered by the plan, the form is not required unless assets excedd $250,000.

I’m afraid that plans that haven’t been updated could also be behind in tax filings.



Submitted by Joseph Arsenault on Thu, 2009-03-19 21:13

That makes sense to me..

A client was telling me that there are a bunch of plans sitting dormant that he has access to rollover to IRAs but there not up to code.. I was trying to articulate the possible scenarios and truth in this claim.

Thanks mgtf4cpa



Submitted by Barry Bacharach on Tue, 2021-12-14 07:55

I have a dormant Keogh plan where I am the sole participant.  The instructions for the Form 5500 at the time that I made the plan dormant indicated that I no longer needed to file the form annually.  My recollection is that, at the time, there was no conduit IRA for a Keogh plan.   The bank that has the prototype for my plan has sent me paperwork to make a restatement of the plan.  I have kept the plan up-to-date (filing the updates with myself).  Do dormant Keogh plans need to be restated? 



Submitted by Alan - IRA critic on Tue, 2021-12-14 15:14

Following is a link that explains the restatement process. The deadline is 7/31/2022 if your old Keogh is the more popular DC version, but it does not apply to DB Keoghs. Apparently, these plans must be restated every 6 years even if dormant because they cannot be terminated before they are restated.
Learn about the IRS plan restatement process for 401(k) plans | John Hancock Retirement



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