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SARSEP Plan with son of business owner eligible


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I have a dentist with a SARSEP plan. He has a son who is age 21 and works part time on his website and has worked for him for over three years now. Questions:

Must the son come into the plan ?

If he does not make any elective deferrals does it help his father in any way for the ADP test ?

How is this test done with the son and the father ?

For ADP testing purposes is he considered a HCE ?

Is the son counted for the rule that says that 50% of all eligible employees must defer ?

If so and he needs to defer will this hurt his fathers elective contribution percentage.

Many thanks

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  • 2 weeks later...

Thank you.

What is the best route for the father on the son ??

Should the son make elective deferrals ?

Is the son limited by the 1.25% since he is related to the father ?

How does the 50% test work with the son ?


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