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. I am starting a limited liability company (LLC). I will be the sole member. Can I ...

  2. Is an employee eligible for an SEP if the plan has already been set up for other ...

    It depends. The employee should meet not only the service requirements, but the age and compensation requirements as well. ... Read Answer >>
  3. How does a Simplified Employee Pension (SEP) plan work?

    Learn how small businesses and their employees benefit from a Simplified Employee Pension, or SEP, IRA, and discover how ... Read Answer >>
  4. Is a Simplified Employee Pension (SEP) IRA tax deductible?

    Learn everything you need to know about your SEP IRA, including the benefits to employers and whether or not a SEP IRA is ... Read Answer >>
  5. How does a Simplified Employee Pension (SEP) IRA work?

    Learn about a Simplified Employer Pension, or SEP, IRA and how it works, who participates and what advantages it has over ... Read Answer >>
  6. How are Simplified Employee Pension (SEP) IRAs taxed?

    Understand the tax advantages of a Simplified Employee Pension IRA plan, and find out how both the employer and the employee ... Read Answer >>
Related Articles
  1. Retirement

    SEP IRA Limits in 2016

    Discover the SEP IRA limits for 2016. Included is a summary, plans that would be ideal candidates for SEP IRAs, and contribution and distribution rules.
  2. ETFs & Mutual Funds

    Is a Vanguard SEP IRA Account Right for You?

    Learn about the SEP IRA offered by Vanguard and why it is one of the best SEP products available, including why it's a good fit for small business owners.
  3. Retirement

    SIMPLE IRA Contribution Limits in 2016

    Learn the SIMPLE IRA contribution limits for 2016, with a brief summary of how the plan works, including eligibility and contribution and distribution rules.
  4. Retirement

    Retirement Planning For The Self-Employed

    Recent studies show that most self-employed Americans are saving little, if anything, for retirement. But making an investment in yourself is worth it.
  5. Retirement

    Plans The Small-Business Owner Can Establish

    Don't hesitate to adopt a smart plan for you and your employees.
  6. ETFs & Mutual Funds

    IRAs and Roth IRAs

    What IRAs are: Tax-advantaged savings accounts for individuals. Pros: Tax benefits; investments grow tax-deferred and contributions may be deductible; numerous investment choices with range of ...
  7. Retirement

    The Pros and Cons of a SEP Account in Today's Volatile Markets

    Discover why you don't have to worry about a volatile market's impact on your simplified employee pension plan. Learn to use your SEP to navigate the markets.
  8. Retirement

    Deferred Compensation Plans for Small Business Owners

    Find out the best tax-qualified options business owners can use to defer their compensation and accumulate capital for their retirement.
  9. Financial Advisor

    How the Self-Employed Can Prepare for Retirement

    The self-employed aren't saving enough for retirement. Here's what they can do to change that.
  10. Retirement

    Keough vs. SEP: Small Business Retirement Plans

    Running your own company can lead to great personal satisfaction, but it can make planning for retirement a huge headache. Here are two plan options.
RELATED TERMS
  1. Simplified Employee Pension - SEP (Simplified Employee Pension IRA)

    A retirement plan that an employer or self-employed individuals ...
  2. SIMPLE IRA

    A retirement plan that can be used by most small businesses with ...
  3. Individual Retirement Account - IRA

    An investing tool used by individuals to earn and earmark funds ...
  4. Savings Incentive Match Plan For Employees Of Small Employers - SIMPLE

    A retirement plan that may be established by employers, including ...
  5. IRA Plan

    A plan that individuals may establish to arrange and plan for ...
  6. Disclosure Statement

    1. A document explaining the rules of an IRA in plain, nontechnical ...
Hot Definitions
  1. Put Option

    An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying security ...
  2. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  3. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  4. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  6. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
Trading Center