ROBS 401k ROllover --- OVERVIEW

ROBS (Rollover for Business Startup)

Pension Pros has been guiding clients thru the ROBS process for 14 years. We are a small boutique firm that prides ourselves in thoroughly explaining the details of ROBS, and providing superior customer service that is available 7 days a week. The ROBS strategy has been utilized for 30+ years by business and franchise buyers as a way
to use retirement funds (previous employer 401k or IRA) to inject cash into a new venture.
There are three keys to using ROBS and remaining compliant: 1) Set up – includes establishing a c-corp and employer sponsored 401k plan
2) Flow of funds – the funds must flow from the old 401k/IRA thru the new 401k,
   and then to the c-corp bank account
3) Use of funds - The funds MUST be used for any legitimate business expense,
                            NOT for personal expenses      Steps in the ROBS process: 1) Upon receipt of our startup forms (Agreement & Questionnaire) and Fee, we will file for
   Articles of Incorporation in your state. This takes anywhere from a few minutes to a few days,
   depending on the state.
2) After articles are approved, we secure the EIN# for the C-corp and the new 401k plan
3) We then prepare all documents for the c-corp and the new 401k plan, usually within 24 hours
4) With these docs, you will open up two new accounts, one for the c-corp and one for the 401k.
   The c-corp acct can be opened at your local bank. This will be your business operating account
   The 401k acct should be opened at Fidelity. The reason is that they have the exact acct type
   that fits this situation. There is NO setup fee and No ongoing maintenance fees.
  This will be your personal 401k account under the new employer sponsored 401k plan, very
   similar to when you were an employee and had your own personal 401k account.
  This 401k has an annual contribution limit of $71k, part of which is a profit sharing component
*Two important points: ROBS is NOT a loan – you never have to pay this money back and
                                            You are not obligated to contribute to the new 401k, it is your choice
5) After the accts are opened, you will request the transfer from your old 401k/IRA into the new
   401k. This is a direct transfer between two qualified retirement accts and is NOT taxable!
   Next, you will transfer the amount needed (does NOT have to be the full amt) into your new
   c-corp acct. At this point, the ROBS process is basically done.
   You can now use the funds for any and all legitimate business expenses, including payroll.
*This 2nd transfer into the c-corp is also not taxable because the new 401k Plan Document has
      wording in it that allows the 401k to make a non-taxable investment into a c-corp.
      This is what makes ROBS work. This is why the new entity must be a c-corp, not an LLC.
6) After this final transfer, we issue a stock certificate to keep this transaction legal and compliant
   The stock certificate is your compliance receipt for this transaction.
Important:This does NOT make your business a stock based business! Like all small
                       businesses, it is an asset based business whose value is determined by the value of
                       its' assets, goodwill, revenue etc.
Fees:Pension Pros charges a one time fee of $3995. This is $1000 less than our competitors.
         And, we do NOT charge an ongoing monthly fee like all others (typically $150+/mth)
         * We complete your annual IRS reporting form for the 401k plan (Form 5500) at NO cost!

Businesswoman using a calculator and writing notes.