must we use document sponsor for all investments in a Sep?

[Jim Chad]

Nonprofit has a 403(b) for deferrals and a SEP for Employer contributions..The need to update the document. Because they have the 403(b), they can't use form 5305. American Funds Doc says American funds is custodian. VanGard doc says Vangard will hold assets.

How does this paragraph play out in real life?

[Mike Preston]

What paragraph?

[Jim Chad]

I am asking about the paragraph in the American funds SEP doc that says "all assets will be held at American Funds"

Does everyone follow this completely? What would happen if you didn't?

[GMK]

qualification issue? not operating in accordance with the plan doc. no?

[Jim Chad]

GMK, that is exactly what I was thinking. But don't the Participants have the right to move there money to another IRA any time they want to? So, since it seems to violate the regs, does this paragraph have any real meaning?

[jpod]

It has a lot of meaning to the American Funds, the custodian and their respective service-providers. It means that if an employee moves money from the SEP IRA to a different IRA then that money is no longer considered part of the SEP for whatever reason relevant.