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Showing results for tags 'SEP and ability to amend'.
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Hi Benefits Link users: Employer "A" started a SEP in 2009 at Wells Fargo bank and neither he nor the bank has a copy of the SEP document that was adopted. We don't know if it had a 0, 1, 2, or 3 year eligibility. Call this OLD SEP. He hired employees for the first time in 2011. Assume he adopts a new SEP in 2013 at another custodian, Schwab, and adopts it as a new SEP, not an amended and restated SEP, effective 1/1/2012. Assume he elects a 3 year eligibility. Call this NEW SEP. Would the fact that the employees hired in 2011 met the eligibility in 2012 under OLD SEP, prevent the employer from being permitted to exclude these same employees by contributing to NEW SEP with the longer eligilibility? I don't think the SEP rules address this. Assume one step further that Owner A had been hired in 2008 and he had started with a SEP with a 1 year eligibility. (I am working with and advisor so don't know at this point when the business started). Since Owner A met the eligibility in OLD SEP in 1 year, is it discriminatory to now amend to NEW SEP to a 3 year eligibility? Qualified plans are governed by 401(a)(4) which addresses a series of amendments being looked at together. I don't think that concept applies to a SEP but don't know. Thanks, Craig Schiller, CPC
