Does anyone know the process/repercussions of "dissolving" a SIMPLE IRA plan and starting a 401k for your firm? Are participants left with their IRA and have to "start over" in the 401k? Common sense tells me they can't roll their SIMPLE balances into a new 401k but I can't find the information anywhere. Thanks!

Establishing a 401(k) would disqualify the SIMPLE plan for the year. Only Plan rule. See Pub 590. Contributions for the year would need to be removed as excess. Any matches as well. Prior year contributions could stay in SIMPLE IRA or rolled/transferred to Traditional IRA if at least two years since the original contribution.

See PUB 560 Chapt 3.

PUB 560

Appleby also has some good information

Here