Plan Document & Technical Questions
What happens to the existing prototype plan document?
What happens to the existing prototype plan document?
It gets replaced. Aboon will rewrite the plan using our IRS pre-approved document. Your client should keep the prior plan documents and amendments for their records.
Will the plan features be any different when it's restated?
Will the plan features be any different when it's restated?
The core features of the plan stay the same. Aboon's plan document standardizes certain features that weren't always available under the prototype plan document. For example, all Aboon Solo(k) documents include Roth elective deferrals and flexible discretionary employer contributions by default.
What features come standard in the plan document?
What features come standard in the plan document?
Participation:
Age 21 and one year of service (12 months with 1,000 hours of service)
For a new plan, this requirement is waived at the start
Contributions:
Pre-tax and Roth 401(k) elective deferrals with age 50 catch-up and age 60-63 enhanced catch-up. For 2026, that's a $24,500 elective deferral, plus an $8,000 catch-up at age 50+ or an $11,250 enhanced catch-up at ages 60–63.
Flexible discretionary employer profit-sharing contributions, fully vested.
Rollover contributions from qualified accounts.
Total contributions (deferrals plus profit sharing) are capped at $72,000 for 2026, before any catch-up.
Withdrawals & Loans:
Financial hardship, age 59 ½, termination of employment, disability, or death.
Loans up to lesser of $50,000 or 50% of account balance.
Rollover funds can be distributed at any time.
Cash or in-kind distributions.
Investment direction:
All accounts are participant-directed.
All accounts must be held in firm brokerage accounts.
Clients review and confirm plan provisions during the signing process.
My client has an outstanding plan loan. Does that create issues with the transition?
My client has an outstanding plan loan. Does that create issues with the transition?
No. An outstanding loan does not affect the plan document transition. Current loan terms continue to apply, and the client must keep making payments according to the existing loan amortization schedule.
What if the plan has a non-December 31 plan year-end?
What if the plan has a non-December 31 plan year-end?
Our Solo(k) currently supports plans on a calendar plan year ending on December 31. If the plan has an off-calendar plan year, our Solo(k) is not the right fit. Note: this is the plan's year-end, not the business's tax year-end — they can differ.
Does Aboon support Roth deferrals?
Does Aboon support Roth deferrals?
Yes. All Aboon Solo(k)s include Roth elective deferrals as a standard feature. Clients can choose to make their 401(k) deferrals on a pre-tax or Roth basis, or both subject to annual limits. For clients that make both pre-tax and Roth contributions, the best practice and an Aboon requirement is to hold each money type in a separate subaccount.
What about after-tax contributions or Roth conversions?
What about after-tax contributions or Roth conversions?
Our Solo(k) does not currently support voluntary after-tax contributions or Roth conversions.
What about protected benefits and 411(d)(6) requirements?
What about protected benefits and 411(d)(6) requirements?
Aboon’s plan document generally protects existing benefits as required by law, but we always recommend the business owner review it for consistency. The client will review and acknowledge these provisions in the signing process.
Non-Solo Plans & Screening
My client has employees. Can Aboon help?
My client has employees. Can Aboon help?
Aboon's Solo(k) offering is specifically for owner-only Solo(k) plans, i.e. businesses with no employees other than the owner(s) and their spouse(s). If your client has non-spouse employees, our Solo(k) isn't the right fit.
Aboon does service non-Solo(k) plans at other recordkeepers. Email us at [email protected] if you'd like to explore that.
What does Aboon screen for to determine eligibility?
What does Aboon screen for to determine eligibility?
Early in the sign-up process, we confirm: (1) the plan is owner-only plan (no non-spouse W-2 employees), (2) the plan year ends December 31, and (3) all plan assets are held or will be held in the firm’s brokerage accounts. If the client doesn't meet these criteria, we'll let them know and direct them back to you.
In addition to their Solo(k) account investments with my firm, my client has investments with another financial institution. Are they eligible to work with Aboon?
In addition to their Solo(k) account investments with my firm, my client has investments with another financial institution. Are they eligible to work with Aboon?
No, Aboon only works with Solo(k) plans where all the plan’s investments are held in brokerage accounts at their advisor firm. To use our Solo(k), all plan investments would need to be transferred to accounts at the advisor’s firm.
⚠️ Key Items for Advisors
These are the most common compliance areas where Solo(k) plan sponsors can run into trouble.
Form 5500-EZ Filing. Solo(k) plans must file Form 5500-EZ with the IRS when total plan assets exceed $250,000 at year end, or when the plan is terminating. Late filings carry IRS penalties. Core clients are responsible for this on their own. Core Plus clients receive Form 5500-EZ preparation service from Aboon. Clients remain responsible for monitoring this asset-based Form 5500-EZ reporting threshold at all times.
Contribution Limits. For 2026, the general annual additions limit is $72,000 (or 100% of compensation, whichever is less). The elective deferral limit is $24,500, with an additional $8,000 catch-up for participants age 50+ or $11,250 super catch-up for participants age 60-63. Exceeding these limits requires correction. Some Solo(k) clients are employees of other businesses. Although each unrelated employer has separate total limits—$72,000 per employer for 2026—each individual has one elective deferral and catch-up limit. Each individual is responsible to track their own deferral limits across multiple employers.
Employee Eligibility Triggers. If a client hires a non-spouse W-2 employee, the plan may no longer qualify as a Solo(k). This triggers additional compliance requirements, including nondiscrimination testing, expanded Form 5500 filing, employee notices, and potential plan document amendments. Clients must notify Aboon immediately if they plan to hire or have hired an employee. The plan cannot simply be limited to the owner(s) and their spouse(s) or abandoned. It requires a formal process to address.
Aboon Asset Requirements. Aboon only supports Solo(k) plans where all the plan’s assets are held in brokerage accounts at their advisor’s firm.
Distribution Responsibilities. The client is responsible for ensuring distributions are processed correctly and reported to the IRS. Core clients handle distributions directly with their financial advisor. Core Plus clients can receive distributions support through Aboon. Required minimum distributions (RMDs) begin between ages 73 and 75 for most owner participants; failure to take RMDs results in significant IRS penalties.