Include SARSEP deferrals in average benefits test?

[MR]

We have a client that had continued to sponsor a SARSEP through 2002. Late in 2002, they decided to install a 401(k) Profit Sharing Plan, with the Profit Sharing Plan effective in 2002 and the 401(k) effective in 2003. So, they no longer sponsor the SARSEP, but some of the employees contributed to the SARSEP in 2002. The company made a profit sharing contribution for 2002 in lieu of the SEP contribution. The profit sharing structure is "new comparability" with different group contributions. The question is, would you count the 2002 SARSEP salary deferrals in the average benefits percentage test along with the profit sharing contributions?

[goldtpa]

Since some courts have ruled that SEPs are not ERISA qualified plans, I would not count the 2002 SARSEP salary deferrals in the average benefits percentage test.