This was really helpful David. I'm posting what I did in case it helps someone else out.
Plan Name: Has to include the word Trust at the end, and of course I need an EIN number for this Trust.
Plan Structure has 2 options:
- a pooled account directed by the trustee
- account for each participant (FBO) account
I was recommended to pick the first one, which seems to contradict what Harry Sit mentions in his finance blog. I was told that since I'm a single participant plan it really doesn't matter much.
My new non-prototype plan is designated as an "Other Qualified Plan"
I'm told the Funding Option doesn't have to be filled out because I'm going to be transferring existing assets from my already existing Fidelity self-employed 401k plan.
I have to attach the first few pages of the Adoption Agreement and include the signature page of this agreement.
I also picked the pooled account since I have no other employees.
I called Fidelity and they said to mark down "401K" rather than "Other Qualified Plan". But said it honestly doesn't matter in terms of the account setup
I have to submit three of these applications so that I can have 3 accounts. - Pre-Tax Account. This account will receive the EmployEE salary deferrals and the EmployER profit sharing contributions.
- After-Tax Account. In this account I'll be able to add Voluntary Employee Contributions, up to the point where I don't exceed the smaller of the adjusted business profit or 54,000
- Roth account, where I will be able to do rollovers from the After-Tax account - hence the megabackdoor Roth.
I have to move the assets in my already existing Fidelity Individual 401k plan over to the new plan's Pre-tax Account.
In order to move these assets I have to submit a "Letter of Instruction". This letter states:
"Please make a non-reportable transfer of assets in kind from my Fidelity Individual 401k plan Account number ****** (******* Self-Employed 401k trust) into the new non-prototype plan. "
Moreover, all three applications and hence all three accounts are all under the same Trust name and EIN number.
Tomorrow I hope to make it to the Fidelity office to file these 3 applications. I hope it works out.
The account application says a minimum of $500 to open each account. However on speaking with the rep, they said you don't need any money to start the account. If no activity, the accounts will remain open for 2 years. So I opted to open 4 accounts. I had to submit 4 applications. It's literally the same application printed out 4 times. Except for one of the accounts, I requested checkwriting privileges. Which not only is it a checkbox in the application, there is a separate Checkwriting form that needs to be sent in. There are 2 different checkwriting forms - Retirement and Nonretirement. You would fill out the
Nonretirement checkwriting form (even though this is your retirement account).
When the accounts are opened, then you can log into Fidelity.com and rename the accounts however you like.
I named mine 1) Pretax 2) Rollover 3) Aftertax 4) Roth
The reason I opened a separate Rollover account is specifically the Discount Solo 401K plan allows in service rollovers to Roth of all accounts. However IRS rules stipulate that Employee Elective Deferrals can only rollover to Roth after 59.5 years old. Whereas EmployER contribution and Rollovers from other 401K plans can rollover to Roth at any time. This matches what is in the plan documents. I just wanted to reserve this option to do an early rollover or partial rollover to Roth in case in the future my income happens to drop putting me in a lower tax bracket.
I actually sent my applications in. It had some hiccups. Like for some reason, they didn't see that I submitted my plan documents. After calling in, this was fixed and my accounts are opened.
I noted that on statements, the name on the account is:
Me Trustee
My Company 401k Plan
Even though I had specified the name on the account to be the Trust. I called in about this and they said it's under the Trust name, however their statements are standard that way.
Now there's no way to directly ACH money into the account unless you have a bank in the name of the Trust. There are 2 workarounds if you want to stay electronic and not use US mail or stopping by a Fidelity branch:
1) You can set up a Business brokerage account with Fidelity with you as the owner
2) You can just use your business bank's bill pay (which is still US mail, but you're not stamping envelopes).
I'll just stick with the billpay option as I don't want to go through the hassle of opening up another Business account.
When calling into Fidelity, make sure you speak to a rep that deals with retirement and non-prototype retirement account. I was led astray by a general Fidelity rep giving a lot of misinformation.