Traditional IRA rolled into SEP IRA

[MarZDoates]

Is it possible to roll a traditional IRA into employee's SEP IRA?

[jevd]

Yes. The Employee's SEP is a traditional IRA that receives the employers SEP contributions. Check with the custodian/trustee as they may not want or allow traditional IRA contributions in the account. Also the client may want to consider that if they co-mingle the SEP plan employer contributions with other types of contributions as they may lose ERISA Title I protection from creditors. This would apply if the SEP plan is an ERISA plan. I realize that this is an untested issue but it is something to think about.

[mbozek]

Could u please explain how a SEP can be a title I plan? SEPS are not subject to Title I provisions such as spousal consent or minimum service rules or filing of annual reports. There is no ERISA protection from creditors in a SEP because the assets are held in an IRA instead of a trust. The IRA does not have the anti assignment language required for qualified plans and ERISA.

[jevd]

My understanding has been that if a SEP plan covers non owners then it is considered an employee benefit plan and has certain Title I coverage under ERISA however I've never seen any cases in regard to it.

[mbozek]

I dont know what provisions of title I you are referring to. SEPS are not subject to spousal consent or QDROs (see In re Groff, 234 Bank. Rptr 153 (1999)), reporting and disclosure or the fiduciary provisions.

[jevd]

I Understand. This is something that was told to me many years ago by a so called expert. I have never seen any more on the issue. I will defer to the experts on this. Has anyone else come across this issue.

Thanks

[jevd]

Check This link

http://www.benefitslink.com/cgi-bin/qa.cgi...e=qa_distribtax

Thanks