co-testing for 401(k) and SEP-IRA

[Guest Barbara Roper]

Our small (20-person) non-profit offers both a SEP-IRA, to which our employer contributes about five percent of employee salary each year, and a voluntary 401(k) to which the employer does not make contributions. It is our understanding that, under the SEP-IRA requirements, we must maintain a prototype plan document that allows contributions to both a 401(k) and a SEP- IRA. Our SEP-IRA provider, Vanguard, no longer makes such a document available to small groups such as our own. Our 401(k) provider, Paychex, has said it cannot provide such a document. It has also mentioned that our plans need to be co-tested -- information that is new to us one year into providing the 401(k). I have several questions: 1) Are we right in thinking we need to maintain a prototype plan document for a plan that allows contributions to both a 401(k) plan and a SEP-IRA? 2) If so, does anyone know how we can get such a document? 3) Is our 401(k) provider correct in telling us that the plans need to be co-tested? 4) If so, does anyone know who provides such services and what we should expect to pay?