A “solo,” “one-participant,” Keogh, HR-10, or self-employed label does not decide Title I coverage. The decisive first screen is whether any employee is a participant covered under the arrangement. A plan with no employee participants is not an employee benefit plan for Title I purposes; when a common-law employee participates alongside a self-employed person, that exclusion no longer supplies the answer. 29 C.F.R. §2510.3-3(a)–(b)
The rule for owners, spouses, partners, and their spouses
For this Title I rule, an individual and the individual's spouse are not treated as employees of a trade or business—incorporated or unincorporated—that is wholly owned by that individual or by that individual and spouse. The ownership condition matters; this is not a general rule that every owner or spouse is ignored. 29 C.F.R. §2510.3-3(c)(1)
A partner and that partner's spouse are not treated as employees with respect to the partnership. Thus, a plan under which only partners (and, where applicable, their spouses) are participants can have no employee participant for this rule. But a partnership plan with one or more common-law employees participating in addition to the self-employed individuals no longer qualifies for the §2510.3-3 plans-without-employees exclusion. Title I coverage and any separate statutory exclusion must then be analyzed before reaching §412. 29 C.F.R. §2510.3-3(b), (c)(2)
Employee participation—not merely the payroll count—controls
ERISA defines an employee as an individual employed by an employer, while §2510.3-3 supplies the special owner, spouse, and partner rules above. The regulation then defines when an individual becomes a participant covered under a pension plan. Depending on the plan terms, that can be when the individual contributes, satisfies designated age and service requirements, or completes service that may be counted for benefits. An employee need not already have an account balance for the census question to be resolved against the owner-only exclusion. 29 U.S.C. §1002(6) 29 C.F.R. §2510.3-3(d)(1)(ii)
Conversely, hiring a worker does not by itself prove that the worker is already a participant covered under this regulation. Review the governing participation provisions and actual contributions or service, while separately addressing any eligibility or operational-compliance issue. 29 C.F.R. §2510.3-3(d)
Facts that change the answer
- A common-law employee begins contributing or otherwise becomes a participant covered under the plan. 29 C.F.R. §2510.3-3(b), (d)
- Ownership is shared with someone outside the individual-and-spouse ownership described in §2510.3-3(c)(1), so the special rule cannot be applied from an “owner” label alone. 29 C.F.R. §2510.3-3(c)(1)
- A worker classified as an independent contractor may instead be a common-law employee, or workers at a related business may affect the plan's coverage and participation facts. ERISA's employee definition supplies the statutory starting point, but uncertain classification and controlled-group facts require professional review. 29 U.S.C. §1002(6)
- The business changes entity form, ownership, workforce, or plan participation terms. The “solo” name can remain unchanged even when the legal facts do not.
Practical examples
Wholly owned business covering only the owner and spouse
Assume the business is wholly owned by the individual and spouse, and they are the only participants. For §2510.3-3, neither is treated as an employee of that business. On those assumed facts, the arrangement is outside Title I, so §412 does not apply because Title I does not apply. 29 C.F.R. §2510.3-3(b), (c)(1) 29 U.S.C. §1003(a)
Partnership plan adds a participating employee
Assume two partners were the only participants, then a common-law employee satisfies the plan's participation conditions. The partners are not employees of the partnership for this rule, but the participating common-law employee changes the result: the no-employee exclusion no longer applies. The analysis must continue through Title I, Part 4, property, handling, exemptions, amount, and form. 29 C.F.R. §2510.3-3(b)–(d)
What to do when the owner-only exclusion no longer applies
- 1Confirm Title I coverage and Part 4 applicability.
- 2Identify the plan's funds or other property.
- 3Identify each natural person whose actual functions constitute handling.
- 4Test person- or institution-specific exemptions.
- 5Calculate the amount and review form, surety, and current reporting materials.
A covered arrangement does not automatically require every owner, fiduciary, or service provider to be bonded. Section 412 applies to people who handle plan funds or other property and are not exempt; the handling test turns on actual access and authority. 29 U.S.C. §1112(a) 29 C.F.R. §2580.412-6
Methodology, legal boundary, and source review
This guide uses DOL's current §2510.3-3 census rule as controlling Title I authority and IRS Publication 560 only to understand small-plan tax terminology. Keogh, HR-10, solo, and self-employed terminology does not replace the DOL test. 29 C.F.R. §2510.3-3(b)–(c) IRS Publication 560
Official sources were reviewed on the source-review date shown above. Recheck the current plan document and census whenever ownership, hiring, eligibility, or participation changes. For broader exclusion outcomes, see the exemptions guide; if §412 applies, continue to the requirements guide.