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Posted

Is there alternative contribution formulas for a SEP - i.e. integrated with SS or is the only acceptable formula pro-rata?

Posted

In general, the permitted disparity rules apply to SEP contributions. See I.R.C. Sec. 408(k)(3)(D). I believe that both SAR-SEPs and model-SEPs (Form 5305-SEP) can't be integrated.

Lori Friedman

Posted

Thank you Lori - I appreciate your help!

Posted

While theoretically true, unless your model SEP contains language that allows for an integrated contribution - you will need a custom drafted SEP document.

Posted

The salary deferral portion of the SARSEP (redundant) cannot be integrated…but the employer contribution portion can be integrated – if the SEP is a prototype of individually designed SEP

By the way, a flat dollar formula- where everyone receives the same dollar amount- is also allowed. This can be allowed under a prototype or individually-designed SEP

Life and Death Planning for Retirement Benefits by Natalie B. Choate
https://www.ataxplan.com/life-and-death-planning-for-retirement-benefits/

www.DeniseAppleby.com

 

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