New 401k for Er w/ SARSEP

[austin3515]

I've found that an employer with a SARSEP can only add a 401k mid-year if they adopted a prototype (and not the 5305A-SEP). Is there any way to get my hands on such a document? The Plan was with Fidelity but Fidelity indicated that they used the 5305A-SEP.

[J Simmons]

Don't know the answer to how to get the document, but most employers that have had SARSEPs have held onto the ease and simplicity vis-a-vis a 401k plan. It's unfortunate that Congress doesn't allow new SARSEPs to be set up.

[Lou S.]

Out of curiosity why would someone with a SAR-SEP now want a 401(k)? And if they want one, why not just put it in first of the year?

I think since new SAR-SEPs were axed by the IRS quite a few years ago you might have trouble finding a proto-type or custom SAR-SEP now since there is really little or no incentive to draft one that I'm aware of at this point other than maintaining existing grandfathered SAR-SEPs.

Lastly if they are currently on a 5305A-SEP are they even allowed to change that to a prototype or custom SAR-SEP mid year? I honestly don't know.

[austin3515]

Out of curiosity why would someone with a SAR-SEP now want a 401(k)? And if they want one, why not just put it in first of the year?

Testing issues.

It ended up not mattering, there was no prototype available anywhere. And I guess for the moment their testing is "acceptable" so we're adding a SH 401k effective 1/1/15.

[Appleby]

I wish I had seen this earlier. Pershing (www.pershing.com) has a prototype. It is available through any of the hundreds of hundreds of broker-dealers that uses their custodial services. I would bet that if someone calls five local broker-dealers, at least one on the list uses Pershing.