Can I still set up an SEP if one of my employees refuses to participate?

By Denise Appleby AAA
A:



You can establish the SEP IRA, even if the employee refuses to participant. However, you would need to establish an IRA for the employee, assuming he or she is eligible, and deposit his or her contribution to the account. You would first need to check with the financial institution to determine whether it would be willing to establish the account with your signature, rather than the participant's.

You may also want to notify the employee in writing when the account is established and funded.



For more insight on SEPs, check out Plans The Small Business Owner Can Establish.



Question answered by Denise Appleby, CISP, CRC, CRPS, CRSP, APA



RELATED FAQS

  1. What are the rules and restrictions on a Spousal IRA?

    Learn about the rules pertaining to spousal individual retirement account contribution and income limits. Find different ...
  2. What are the benefits and advantages of the Teacher Retirement System?

    Learn about some of the primary benefits of a teacher retirement system and what similarities it has with other types of ...
  3. How are IRA withdrawals taxed?

    Learn how IRA withdrawals are taxed at retirement age and for qualified withdrawals. Consider the different tax consequences ...
  4. What are the main differences between a Roth 401(k) and a Roth IRA?

    Learn the difference between a Roth 401(k) and Roth IRA. Each offers the benefit of many years of tax-free compounding, a ...
RELATED TERMS
  1. Registered Holder

    Shareholders who hold their shares directly with a company.
  2. Duty Of Loyalty

    A director's responsibility to act at all times in the best interests ...
  3. Duty Of Care

    One of two primary fiduciary duties of directors, the duty of ...
  4. Hard-To-Sell Asset

    An asset that is extremely difficult to dispose of either due ...
  5. Adverse Domination

    A legal doctrine that allows regulators to bring litigation against ...
  6. Entitlement Offer

    An offer to purchase a security or other asset that cannot be ...
Related Articles
  1. Starbucks As An Example Of The Value ...
    Investing News

    Starbucks As An Example Of The Value ...

  2. How Does A Reverse Mortgage Work?
    Retirement

    How Does A Reverse Mortgage Work?

  3. 5 Key Factors Your Financial Plan May ...
    Retirement

    5 Key Factors Your Financial Plan May ...

  4. How Mergers and Acquisitions Can Affect ...
    Investing Basics

    How Mergers and Acquisitions Can Affect ...

  5. Self-Directed IRA: The Right Move For ...
    Retirement

    Self-Directed IRA: The Right Move For ...

Trading Center