Review a defined benefit plan for a solo dental practice by distinguishing ownership from workforce, checking related entities, reconciling the census, and testing funding against collections.
A defined benefit plan for a solo dental practice starts with two checks: who belongs in the employer and employee review, and whether collected practice cash can support the actuary's funding schedule. One owner or one treating dentist does not establish an owner-only workforce. A hygienist, assistant, front-desk employee, departed worker, or relationship with another practice can change the facts behind an illustration.
This guide helps a dental owner prepare that decision file. Use the worksheet and payroll reconciliation steps below to clarify what “solo” means for the practice. The general owner checklist covers the wider adoption decision.
Use precise descriptions before requesting an illustration. A solo owner owns the practice alone. A solo clinician may be the only dentist treating patients while employing a dental team. An owner-only workforce is a separate factual question that the plan professionals must confirm, including relevant employment and entity relationships.
The IRS Publication 560 definitions explain common-law and leased employees. Payment through an agency or outside payroll is a reason to supply more facts, not a conclusion that the worker can be omitted. Ask the advisers to assess worker status and plan treatment before treating an illustration as owner-only.
Complete these rows with source documents and name the person who will resolve each unanswered question. This is a preparation worksheet, not a legal eligibility test.
| Decision question | Evidence to gather | What to request from the adviser |
|---|---|---|
| Am I the only owner, the only clinician, or the only worker? | Ownership records, the full payroll population, departures, rehires, and a list of workers paid elsewhere. | A written description of the population used in the illustration and any unresolved worker-status questions. |
| Does another entity need review? | Each entity's owners and ownership percentages, family relationships, payroll, services performed between entities, and management arrangements. | A controlled-group and affiliated-service-group review; identify the employers and records included in the analysis. |
| Have compensation and service been reconciled? | Pay-code totals, bonuses, personnel dates, time records, and payroll-to-ledger explanations. | Confirmation of the plan definitions applied and the questions still open. |
| Can the practice fund the proposal during weaker collections? | Monthly collected cash after operating costs, debt service, taxes, reserves, and planned equipment payments. | A dated funding illustration, payment timing, administration costs, and an explanation of the weaker-cash scenario. |
| Will the facts change soon? | Associate offers, a second location, ownership discussions, transfers, and acquisitions. | Which event requires a new census or illustration before the owner relies on today's proposal. |
Separate entities deserve review even when their names and bank accounts differ. The IRS related-employer presentation discusses controlled groups and affiliated service groups in retirement plans. Disclose ownership and service relationships; the existence of another entity alone does not establish aggregation or an exception.
Imagine a dentist who owns one practice and is its only treating dentist. Payroll includes a hygienist, two assistants, and a front-desk employee. One assistant departed during the year. The dentist also has an interest in another entity that provides management services. These are invented facts for a decision worksheet, not a client result.
The owner initially asks for a “solo” illustration. The office manager instead supplies the full period's workforce, including the departed assistant; the accountant supplies the entity map and services agreement. The administrator asks for missing service records and the advisers review the management relationship. They then identify the appropriate population for design and testing. This example reaches no conclusion about which employees earn benefits or whether the entities must be combined.
The owner next asks for employee and owner funding implications and places the actuary's dated schedule beside collections and debt service. The decision can now be reviewed against the actual practice facts. A sole ownership interest and strong production figures by themselves would not have supplied that evidence.
Export payroll for the period the administrator requests, including off-cycle runs and employees who left during it. Start with the full population: owners, associate dentists, hygienists, assistants, front-desk staff, and other workers. An active-employee screen can miss someone paid earlier in the year.
For each person, collect a consistent employee identifier, birth date, hire and termination dates, service information requested by the administrator, compensation by pay code, employing entity, and ownership relationship. Include rehires and transfers between locations. Ask how records for agency workers or workers paid outside payroll should be supplied; a payment label alone does not settle treatment.
Have the plan professional determine eligibility and coverage from the facts and plan terms. Do not remove a part-time hygienist or associate simply because the owner expects exclusion. The IRS qualified-plan requirements address participation, coverage, nondiscrimination, and operating according to the plan document.
Use a short exception log with the employee identifier, mismatch, source record, person responsible, and resolution. This is an accounting preparation framework, not an eligibility test.
A reliable dental bookkeeping process makes this reconciliation repeatable. Keep the raw payroll export, the compensation mapping, the exception log, and the approved census together so the next reviewer can reproduce the totals.
Assume a practice's annual gross-wage export totals $640,000, while a draft census totals $610,000. These invented amounts illustrate a data check; they are not plan contributions, deduction estimates, or a client result.
| Reconciliation item | Hypothetical amount | Action |
|---|---|---|
| Draft census wages | $610,000 | Keep the original version for comparison. |
| Departed assistant omitted from active roster | $18,000 | Add the employee's payroll and service records for review. |
| Associate's off-cycle production bonus omitted | $12,000 | Add the pay code and payment record to the mapping. |
| Reconciled gross-wage population | $640,000 | Ask the administrator to apply the relevant plan definitions. |
The difference is $30,000: $18,000 plus $12,000. Reconciliation identifies why the draft was incomplete. It does not establish that the departed assistant earns a benefit or that every dollar of the bonus counts for every plan calculation. Resolve those questions with the administrator before requesting a revised illustration.
Once the data is reconciled, request the owner and employee funding implications, administration fees, and assumptions in writing. The IRS defined benefit plan overview identifies the enrolled actuary's funding role and the plan's greater complexity and maintenance cost. A payroll reconciliation cannot calculate required funding.
Compare the proposed schedule with monthly patient collections after payroll, laboratory and supply bills, equipment payments, taxes, and a working-capital reserve. Show a weaker collections case. Ask the actuary what funding obligations remain if collections fall, an associate joins, or compensation changes. A monthly close with context helps detect those changes while decisions can still be revisited.
Name who supplies payroll corrections, approves the census, coordinates the existing 401(k), and tracks valuation and filing requests. Have partners confirm ownership facts and review what a joining or departing owner changes. Ask the adviser to document whether PBGC coverage or an exception applies; professional-service employer rules require a factual review.
Ask the advisers to confirm ERISA applicability. For plans subject to ERISA, the Department of Labor's sponsor guidance explains fiduciary duties. Its service-provider guidance calls for monitoring providers after selection. Assign someone to review their reports and fees. Use the dental owner review calendar to schedule checks around staffing, financing, and ownership decisions.
TaxBowl's dental practice accounting services can organize payroll and books for that handoff. Our tax team can coordinate the tax inputs with the plan professionals. Individual plan and practice facts determine coverage, benefits, funding, and deductions.
When the partners receive competing designs, use our multi-dentist proposal comparison to align census assumptions and separate owner funding from total practice cash requirements.
