PAL Posted January 30, 2013 Posted January 30, 2013 Can HCE's be excluded from SEP participation? What about excluding HCE's that are not there on the last day of the plan year from receiving an allocation?
ETA Consulting LLC Posted January 30, 2013 Posted January 30, 2013 No. No. These aren't qualified plans subject to coverage rules of 410(b). They are self-contained vehicles with explicit rules on eligibility. Good Luck! CPC, QPA, QKA, TGPC, ERPA
Gary Lesser Posted January 31, 2013 Posted January 31, 2013 No, but even though all employees must receive the same (uniform) rate of contribution (integration aside); a rate of contribution that decreases as compensation increases is considered uniform. [i.R.C.§§401(l), 408(k)(3)(D)] An individually designed plan would be needed. Consider too, if old enough, the HCE could remove contributions the next day without penalty. Hope this helps. Perhaps the HCE could join a union and be excluded under the document from participating.
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