Which benefit resulted from EGTRRA that applies to Solo 401(k) plans?

The response that indicates an increase in profit-sharing contributions to 25% is accurate in the context of the Economic Growth and Tax Relief Reconciliation Act (EGTRRA). This legislation, enacted in 2001, made significant changes to retirement plans, including enhancing contribution limits.

Specifically for Solo 401(k) plans, which cater to self-employed individuals or business owners with no employees, the act allowed for a higher cap on profit-sharing contributions. Under EGTRRA, the limit for profit-sharing contributions was raised to 25% of an individual's compensation, thereby allowing those contributing to Solo 401(k) plans to potentially save more for retirement. This increase provides a significant advantage for self-employed individuals looking to enhance their retirement savings, as they are able to maximize contributions based on their earnings.

The other options do not accurately reflect changes associated with Solo 401(k) plans under EGTRRA. For instance, there was no mandate for employee participation or any requirement for eliminating elective deferrals. Thus, the enhancement of profit-sharing contributions is the key takeaway that underscores the benefits offered by EGTRRA for Solo 401(k) plans.