What are the advantages of a Solo 401(k) compared to a SEP? There are several advantages a Sterling Trust Solo 401(k) has over a SEP.  An additional salary deferral is allowed in the Sterling Trust Solo 401(k) that is not available with a SEP. The total pre-tax contribution could be higher at certain levels of income. The Sterling Trust Solo 401(k) contribution can be flexible from year to year. The Sterling Trust Solo 401(k) has a loan feature not available with a SEP. How does a Solo 401(k) differ from a traditional 401(k)? There are no differences in the actual plan document or adoption agreement. The only difference is the traditional 401(k) was not as attractive to owner only businesses prior to legislative changes in 2002, as other retirement vehicles that offered similar benefits.  Back to Questions Is the Sterling Trust Solo 401(k) expensive to maintain? No. The annual base administration fee for a Solo 401(k) is $300. Other fees may apply. Is a Solo 401(k) an option if my company has employees?  What if I employ my spouse and/or my child? The Solo 401(k) is an option if all of the employees (excluding the owner) are: Excludable from plan participation as determined by ERISA (i.e. part-time employees and any contract labor) Direct family members A Solo 401(k) is not an option for a business that has any includable employees under ERISA. If the business has includable employees, a traditional 401(k) plan or other retirement plan such as a SEP or SIMPLE IRA are options for the business to consider. Back to Questions  What is the deadline for filing my salary deferral? A written salary deferral election must be filed by the last day of the tax year if your business is unincorporated. If incorporated, the election must be made before compensation is payable.   What at is the deadline for funding my Solo 401(k)?  This depends on whether the business is incorporated. If the business is not incorporated, the due date is the tax filing date plus extensions (similar to a SEP), and a written election must be made by the end of the prior tax year. If the business is incorporated, the deferral must be made within 15 days of the date the funds are available to you. Back to Questions

How often can I make contributions and deferrals -- each pay period, quarterly, semi-annually or annually? Sole proprietor - at the individual's discretion, but generally on or before the tax filing date, including extensions. Partnership - at the individual's discretion, but generally on or before the tax filing date including extensions. Incorporated - salary deferrals must be paid based on payroll periods, meaning the employer has 15 days from the actual pay date to make a contribution to the plan. The company contribution or discretionary match can be made on or before the tax-filing deadline. What is the advantage of a Solo 401(k) versus a Profit Sharing Plan? Can I contribute the same amount to either plan?  The advantages of the Solo 401(k) over a Profit Sharing Plan are: The capability to make an additional salary deferral contribution of up to $15,500 for 2007 and 2008. The Sterling Trust Solo 401(k) offers are a loan provision. Daily trading capability through Sterling Trust's web site or voice response unit. Back to Questions What may I invest in? Am I limited to mutual funds? Numerous investment options are allowed within a Sterling Trust Solo 401(k). A daily plan will be limited to mutual funds.  However, a quarterly plan may hold any publicly traded asset - including a participant-directed brokerage account as well as other assets.    Does the Sterling Trust Solo 401(k) offer an option to obtain a loan from the plan? How do I go about this? Yes. The employer may request a loan from a Sterling Trust Solo 401(k). Simply complete the loan request forms for your Sterling Trust Solo 401(k) found in the plan administrator's guide that was provided upon adoption of the plan, or contact our Qualified Plan Services group at QPServices@uwbank.com or call 800.955.3434 option 3 Back to Questions   Can I have a Solo 401(k) and another qualified plan at the same time? If you have only one employer you can only participate in one plan. However, if you have multiple employers, you may participate in each employer's plan at the same time, provided that your combined total contributions do not exceed the annual maximum $45,000 limit for 2007 and $46,000 limit for 2008.  Can I rollover my IRA into a Sterling Trust Solo 401(k)? An IRA may be transferred into a Sterling Trust Solo 401(k). In order to do so, please complete the necessary transfer paperwork and submit to Sterling Trust. What is the maximum contribution amount to a Solo 401(k)? The maximum that may be contributed to a Solo 401(k) for 2007 is $45,000 and for 2008 is $46,000.  If the participant will be age 50 or over by December 31, a catch-up contribution of $5,000.    Back to Questions