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SAR SEP Plan ADP test


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I service an old SAR SEP plan with American Funds. The self employed owner and his employees do deferrals. I have done the ADP testing to make sure he stays within the limits. We have a 3 year wait to be eligible.

His wife now works for him. The document can allow employees to come into the plan for deferrals only without waiting the 3 years ( separate eligibility ). If we change this I presume the ADP test stays the same using just eligible employees for deferrals.

So if these employees including his wife come in immediately for deferrals only --- would they NOT get the top heavy munimum until their 3 year regular wait is up ??

How would the ADP test work for the husband ( owner) and his wife. Are they each limited to the 1.25% figure ? Are they aggregated somehow ?

Thanks,

Bob

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