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1 SARSEP 2 Documents?


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I know very little about SARSEPs, but have been asked to research the following:

Client has existing SARSEP. Original documentation was signed with ABC investment company. That documentation has no requirement that all assets be invested with ABC Company. Broker recently adds investments from XYZ Investments as an option. XYZ requires company to fill out new documentation through them. Company complies, using original effective date.

Is this all okay? Does the new document supercede the old? This seems too obvious to me, but I was asked to find an answer.

Thank you.

Kate Smith

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Let's assume the original document is current. If the document was an amendment to the first plan then you only have one plan, otherwise two plans. If it is an amendment, the original effective date may be reflected on the new document, but the effective date of the amendment can only go back so far. Assuming a 2004 CY plan, the amendment would be effective no sooner than January 1, 2004 (if executed before the 2004 return due date in 2005).

Slightly different rules would apply if this was the adoption of a prototype that was recently approved by the National Office of the IRS and then being adopted to replace the existing plan.

Hope this helps you.

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