Guest Elizabeth Gaskins Posted October 8, 2002 Posted October 8, 2002 can an employer with only 2 employees, each an hce (partners), have a sep or ps plan and take different allocations? i.e. one partner wants to take a 25% of his compensation contribution and the other only wants 10% of his compensation. does anyone see a problem with this since there are no nhce's?
Archimage Posted October 8, 2002 Posted October 8, 2002 I don't see a problem with that except that you will have to state this in the plan document. If you are using a prototype then you would have problems. You would probably have to use a custom document.
RTK Posted October 8, 2002 Posted October 8, 2002 Elizabeth, Regarding the SEP, take a look at 408(k)(3)©. Although I do not do a lot of SEP work, I read that section as requiring that SEP contributions be uniform for all employees, including for SEPs covering only HCEs, except to the extent permitted by the permitted disparity rules. Thus, I do not think that you can do the 25%/15% contribution in a SEP.
Archimage Posted October 8, 2002 Posted October 8, 2002 Yes, my statement was meant for the profit sharing piece, not the SEP.
Guest Elizabeth Gaskins Posted October 9, 2002 Posted October 9, 2002 thank you for the information.....much appreciated
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