SEP and 401(k)

[Earl]

1st employee would enter SEP 1/1/05. Would enter 401(k) 1/1/04.

3 owners have a SEP and want to have a 401(k) to max out.

In 2004 could they have a SH 401(k) and the SEP so that the employee would get only the 3% Safe Harbor Non-Elective to satisfy ADP & Top Heavy and then max out the owners in the SEP?

Thanks

[jaemmons]

From what you have given, I don't see a problem with what you are suggesting.