Merge SEP into 401(k)?

[Medusa]

One of our clients recently acquired another company with a SEP. They would like to merge the SEP into their existing 401(k) plan. Given that SEPs are funded with IRA accounts, is this type of merger possible?

I realize that it is possible if elected by the employee, but does the employer have the discretion and authority to accomplish this merger without employee involvement?

Thanks in advance for any thoughts.

[Archimage]

I would not believe that a merger is possible since one is a qualified plan and the other is an IRA.

It also may not be up to the employee to rollover the IRA to the qualified plan. The plan will have to be amended to allow for rollovers from IRAs.

[mbozek]

The SEP has no assets that can be merged because all of the accounts are held in IRAs owned by each employee. Only the employee can decide wther to transfer assets to another IRA or Q plan. The employer can permit rollovers from the SEP/IRAs to the 401(k) plan.