QUESTIONS ABOUT SEP IRAs

Do employees have the option not to participate?

Yes. Employees have the option not to participate in the plan. However, for the plan to remain in compliance with applicable law, all employees who are eligible must be permitted to participate in the SEP plan.

Can an employer contribute for participants who are older than 70½?

Yes. Unlike a Traditional IRA, an employer must make contributions on behalf of an employee even after the employee reaches age 70½, if the employee still qualifies for the contribution.

Can employers restrict employees from withdrawing their SEP funds?

No. Employees are immediately 100 percent vested in contributions made by an employer and the employees.