Defined benefit plan with SEP

[Guest draper]

IF a sponsor wants to have a defined benefit plan and a SEP, must they adopt a individually designed SEP; are there any model/prototype SEPs which can accomodate this configuration?

Draper

[Gary Lesser]

A nonmodel SEP plan may be adopted and used with a defined benefit plan.

Code Section 404(a)(7) will apply to limit deductions to the greater of (a) 25 percent of compensation, or (b) the minimum funding standard amount. Nondeductible amounts may be carried forward (but may also be subject to a 10% penalty until corrected).