Are new contributions to a SEP set up by a previous employer allowed?

[Guest BillP]

I have a SEP that was set up by a previous employer. I am now a self employed consultant. Can I make deductible contributions to my existing SEP plan, or do I need to set up a new SEP for my current business? (In other words, are SEP plans company/employer specific?)

[Bird]

The SEP (plan) is the vehicle that gets money into the IRA. The IRA may say "SEP-IRA" or something like that on it, but it's an IRA. You'd typically be allowed to do rollover contributions into it, and maybe "regular" IRA contributions.

You would definitely need a new SEP document to allow your business to contribute to the existing IRA. But, the existing IRA might have some limitations, so you really need to check with the investment company. (Something tells me they aren't likely to allow it, especially if the existing one says "OLDCO SEP-IRA" in the titling. I wouldn't fight too hard; just open a new account and then roll the old into the new.)

[Guest BillP]

This is very helpful. Just as additional information, the SEP-IRA is with Fidelity, and it is titled "My name - SEP IRA" (i.e. not "OldCo-SEP IRA").

I have in the past checked with Fidelity on this, and they didn't seem to know too much (translation: They said go ahead, it's fine, but they didn't sound entirely knowlegable about it).

[Appleby]

BillP…Like Bird said, just complete the SEP form for your business to ‘adopt’ the SEP. If you like, provide Fidelity with a copy so that they can keep it on file. Since the SEP is just in your name, no problem…you can just make SEP contributions from your business to the existing SEP.

If you do decide to move those assets to a new SEP, you may want to consider doing so as a transfer, instead of a rollover…too many errors occur with rollovers that can be avoided with a transfer…plus, with rollovers you are limited to one per twelve month period, whereas you can do an unlimited number of transfers at anytime.