
A solo 401k retirement plan may be subject to ERISA requirements, but it depends on the plan's structure and the employer's status.
A solo 401k plan is considered an employee benefit plan and is subject to ERISA if it has two or more participants.
If a solo 401k plan has only one participant, it is not subject to ERISA, but it must still follow IRS rules.
The IRS considers a solo 401k plan to be a one-participant plan, but ERISA only applies to plans with two or more participants.
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When Employee Benefits Are Not Subject to ERISA
Solo 401k plans are not typically classified as standard ERISA plans because they're for business owners only. This means they don't include non-owner employees, so certain ERISA titles don't apply to Solo 401k plans.
Traditional IRAs and Roth IRAs that are not sponsored by employers and are initiated and governed by the individual are also not ERISA qualified. This is because they don't meet the criteria for ERISA coverage.
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The federal Employee Retirement Income Security Act (ERISA) applies to most, but not all, employee benefits provided by private sector employers. This broad preemption supersedes all state laws that relate to employee benefits.
Solo 401k plans are an example of employee benefits that are not subject to ERISA, thanks to their limited scope and business owner-only focus.
Plan Types
A solo 401(k) plan is a type of retirement plan designed for self-employed individuals and small business owners.
The plan can be structured as either a traditional 401(k) or a profit-sharing plan.
There are no restrictions on the number of employees who can participate in a solo 401(k) plan.
However, to be eligible, you must have a legitimate business and earn self-employment income.
Solo 401(k) plans are subject to the same ERISA rules as other employer-sponsored plans.
Broaden your view: Controlled Group Solo 401k Plan
Solo 401(k) and ERISA
A solo 401(k) is not subject to ERISA if it's provided by a self-employed individual or a business with just one employee, because ERISA applies to most, but not all, employee benefits provided by private sector employers.

ERISA's broad preemption supersedes all state laws that relate to employee benefits, which is why most employee benefits are subject to ERISA.
However, a solo 401(k) is considered a self-directed plan, which means it's not subject to ERISA's rules and regulations.
The federal Employee Retirement Income Security Act (ERISA) has a very broad preemption that applies to most employee benefits, but not all.
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Sources
- https://www.halberthargrove.com/erisa-retirement-plans/
- https://www.forbes.com/sites/greatspeculations/2018/03/23/not-all-solo-401k-plans-are-the-same/
- https://www.irafinancialgroup.com/learn-more/solo-401k/solo-401k-the-law/
- https://www.debofsky.com/articles/retirement-plan-governed-by-erisa/
- https://westwoodgroup.com/weeklyfp/retirement-plans-most-appropriate-for-self-employed-sole-proprietorship-partnership/
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