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Switching Financial Institution for SARSEP


Guest kprhok
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I have a client who wants to move their SARSEP assets from one financial institution to another. It is my understanding a SARSEP requires either a prototype from the institution or IRS form 5305A-SEP form along with a 5305 SEP form.

The receiving financial institution does not have its own prototype SARSEP plan, so the hope is that the employer can simply use the existing one if it's not a prototype from the current institution (I am assuming they would prohibit use of their prototype without the assets).

I don't know if the client can simply adopt the receiving financial institution's 5305-SEP form and keep their existing 5305A form, or whether they must execute a new 5305A-SEP form. Does it depend on whether they used a prototype from the old financial institution? And, are there any limitations on the employer's ability to require all employees to move their SEP IRAs to the new institution.

Thanks in advance for feedback!

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Starting at the end, the employer has no ability to control the assets in the employees' IRAs. Once the money is in, the accounts are, essentially, just regular IRA accounts, controlled by the employees.

As for documentation, I think you just need the 5305-A-SEP form to restate the SARSEP (and a 5305-SEP if there is employer money too).

Ed Snyder

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Starting at the end, the employer has no ability to control the assets in the employees' IRAs. Once the money is in, the accounts are, essentially, just regular IRA accounts, controlled by the employees.

As for documentation, I think you just need the 5305-A-SEP form to restate the SARSEP (and a 5305-SEP if there is employer money too).

Thank you very much!

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