accrued to date testing with sep plan

[Draper55]

I am testing a new db plan and considering using accrued to date. The client previously maintained a SEP.

Is it required,allowed,not allowed or unkown whether I can use the normalized SEP balance divided by the testing service to add to my NAR and MVAR from the db plan?

Draper1?

[AndyH]

You'd then be aggregating a db with a sep and the consensus of opinions that I have read is that you cannot do so because a SEP is not a "Qualified Retirement Plan" under 401(a)(4).

[Draper55]

Andy:

If the SEP balances were rolled into a 401(a) plan,the db plan or another dc plan, would it then be ok?

Draper1

[AndyH]

In my opinion, no. The allocations taken into account are the employer contributions made during the measurement period. The measurement period is generally the period benefitting under the plan or plans being tested, benefitting for 410(b) purposes that is.

I think the SEP rollover would be handled in one of two ways: (1) ignored because it preceded the measurement period or (2) ignored because it is rollover money, just like any other rollover money would be ignored.