can an employer with only 2 employees, each an hce (partners), have a sep or ps plan and take different allocations? i.e. one partner wants to take a 25% of his compensation contribution and the other only wants 10% of his compensation. does anyone see a problem with this since there are no nhce's?

I don't see a problem with that except that you will have to state this in the plan document. If you are using a prototype then you would have problems. You would probably have to use a custom document.

Elizabeth,

Regarding the SEP, take a look at 408(k)(3)©. Although I do not do a lot of SEP work, I read that section as requiring that SEP contributions be uniform for all employees, including for SEPs covering only HCEs, except to the extent permitted by the permitted disparity rules. Thus, I do not think that you can do the 25%/15% contribution in a SEP.

Yes, my statement was meant for the profit sharing piece, not the SEP.

thank you for the information.....much appreciated