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SARSEP - Can EE opt out?


Guest Roger K.
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Guest Roger K.

WE have an old grandfathered SARSEP in which we generously contribute 10% to all eligible employees. We just had an employee become eligible and she asked if she could opt out of our plan including employer contributions. She indicated that having a SEP Plan will have negative consequences on their current retirement savings strategy.

Is it possible for an employee to opt out of SEP in which Employer has contributions to all eligible employees?

I know an employee can opt of 401k but did not know about SARSEP. Employer would like to allow this this as it would save him over $3,000 in contributions.

Thanks.

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She indicated that having a SEP Plan will have negative consequences on their current retirement savings strategy.

Employer would like to allow this this as it would save him over $3,000 in contributions.

I'm sure there is some logic behind this but I wish I could say throwing away 3 grand that someone wanted to give me would negatively impact my retirement. I'm sure she hasn't thought this all the way through.

And I agree with ERISAAtoolkit above.

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