Transfer Defined Benefit Plan to Solo 401k

I would appreciate it if you clarify the following for us.

Thanks,
S. Zendehrouh

1. Please let us know what we need to do to switch from an existing funded defined benefit pension plan (for one participant and spouse) to a Self-Directed Solo 401k plan.

Question: Could we amend our existing defined benefit plan and switch, or do we need to first terminate our existing defined benefit plan and start a new Self-Directed Solo 401k plan?

 Answer:

You have following options:

Option 1. Keep current defined benefit plan (DBP) open and Open Solo 401k as the regulations allow for multiple plans, you just can't exceed the annual contributions limits between both plans. See IRS Pub. 560 for more information regarding multiple plans.
http://www.irs.gov/pub/irs-pdf/p560.pdf

Option 2. Close the DBP and transfer the assets to Solo 401k. Your new Solo 401k provider will generally prepare the transfer forms to ensure the movement of the Defined Benefit Plan to Solo 401k is not a taxable event, or the current DBP provider will have you complete their transfer-out forms.