gcrechale

Employer currently has a Model 5305-SEP and wants to add a CB plan - they cannot use a 5305-SEP with a CB plan, so they will need to establish a new SEP. Once they are able to find a provider to prepare the new SEP, will the new SEP be an amendment to the original 5305-SEP or a brand new employer plan? If it is a new employer plan, will the current participants in the Model 5305-SEP be allowed to roll their money into the new employer SEP plan?

We have an existing SEP (20 HCEs and 1 NHCEs) with 25% employer contribution each year for each participant. Employer wants to add a Cash Balance plan but does not want to leave the SEP arrangement and go with a PS/401(k) plan. So we will have a SEP (not a 5305-SEP) with each participant continuing to receive 25% each year and then certain of the HCEs receiving some amount of allocation/funding into the CB plan. The NHCE will be allocated whatever is necessary. Is this a viable arrangement? What is the tax deduction limits for a set up like this? Can we allocate 25% in the SEP and also what is necessary in the CB and not exceed the tax deduction limits? Are we allowed to consider what is allocated in the SEP for the NHCE when determining what the NHCE must receive in the CB plan just like we normally do when we have a PS/401(k) arrangement alongside a CB plan?