Waive Participation in a SEP

[MarZDoates]

Can an employee eligible to receive a SEP contribution elect not to receive it? All eligiblity requirements have been met. Not a SAR-SEP. Thanks.

[jevd]

My understanding is that all that qualify must receive a contribution. The regulations allow an employer to set up an IRA for a missing or reluctant employee who does not want to participate. Its a qualification issue.

See notice 81-1

Also SIMPLE, SEP, & SARSEP Answer Book Q & A 2-67

Gary S. Lesser & Sue D. Diehl

[Note: In the 11th edition, see Q&A 2:64; "Participation in a SEP is automatic within the eligible group of employees." Thus, participation can not be waived. If age 59-1/2 or older, the contribution could be withdrawn after it is made. Jevd is correct---GSL]