Sar Sep

[Guest Susan M.]

Hello,

If a plan has an 401k Profit sharing plan but is not funding this plan

Can they also adopt a sep in the name of the plan or does the profit sharing plan need to be terminated

Thank you

sue

[Jim Chad]

If people have the right to defer into a 401(k), I don't see how they can have a SEP. What do other think?

[masteff]

1) your title says "sar sep". you can do a "sep" but not a "sar sep". the "sar" part of it was no longer permitted in new plans after 1996.

2) the instructions on form 5305-SEP say:

"When not to use Form 5305-SEP. Do not use this form if you:
1. Currently maintain any other qualified retirement plan. This does not prevent you from maintaining another SEP."

[Flyboyjohn]

The prohibition on "currently maintaining any other qualified retirement plan" is a condition IRS imposes on using their Form 5305-SEP and not part of the code or regulations

There was a time when you could find "private" SEP documents from finaicial institutions that didn't contain the "no other plan" provision

Please let this group know if you're successful in finding a SEP document without the offending prohibition

Thanks