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2 SEP plans for the same individual for 2 different companies. Is this allowable?


Guest nan002
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Possibly...but there may be no advantage to having two SEPs instead of one, because of the controlled group rules. In general, the controlled group rules treat employers that are part of a controlled group as one employer for retirement plans purposes…which means that only one plan limit would apply . If she owns 100 percent of both businesses, the businesses are part of a controlled group. If she owns less than 100 percent, then the applicable rules must be applied to determine if the businesses are part of a controlled group …or part of an affiliated service group

Life and Death Planning for Retirement Benefits by Natalie B. Choate
https://www.ataxplan.com/life-and-death-planning-for-retirement-benefits/

www.DeniseAppleby.com

 

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And if the employers are related, controlled, or affilliated, the plan with the least stringent requirements apply. If plan provisions differ as to testing or allocations they may be discriminatory. Also, compensation should be defined the same in both plans. Both plans may not be fully integrated.

Would it be possible for both entities to adopt a single plan? If not, why not?

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