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Guest ingridak
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Guest ingridak

In a SEP plan (5305 SEP) that excludes union employees and has a one year service requirement, if an employee changes to non-union mid-year, is he ineligible for a contribution until the next year?

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He should be eligible for a contribution in the year he is not a union employee. "Service" for a SEP is having worked DURING any "ONE" of the past five years; so it's not a Year of Service like qualified plans. Also, "SERVICE" is not defined as working under a certain classification (i.e. Union). Hence, he has already met the service requirement while continuing to be excluded each year due to union status. As soon as his status changes, he's now eligible because he has already performed the service.

Good Luck!

CPC, QPA, QKA, TGPC, ERPA

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