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 is the difference between a 408 (k) plan and a 401 (k) plan?

    Learn key differences between 401(k) and 408(k) plans. Employers provide different options to help employees save for retirement, ...
  2. What are the benefits of an independent/individual 401(k)?

    Understand the benefits of the individual 401(k) retirement savings plan and how it differs from traditional IRA based retirement ...
  3. How do I set up a 408(k) plan in my business?

    Understand the necessary steps for setting up a 408(k) retirement plan, and get an overview of the SEP and SIMPLE plan options ...
  4. How does a qualified retirement plan early distribution work?

    Weigh the pros and cons of taking an early distribution from a retirement account. Most early distributions are subject to ...
RELATED TERMS
  1. Entitlement Offer

    An offer to purchase a security or other asset that cannot be ...
  2. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  3. Employer's Liability Insurance

    A product for employers that protects them from major financial ...
  4. Strategic Management

    The management of an organization’s resources in order to achieve ...
  5. Performance Management

    The management of employees, departments, and organizations to ...
  6. Social Enterprise

    An organization that is directly involved in the sale of goods ...
comments powered by Disqus
Related Articles
  1. When Your Job Offers An Awful Retirement ...
    Retirement

    When Your Job Offers An Awful Retirement ...

  2. Top 5 Strategies To Pay For Elder Care
    Retirement

    Top 5 Strategies To Pay For Elder Care

  3. 10 Common Retirement Planning Mistakes ...
    Retirement

    10 Common Retirement Planning Mistakes ...

  4. Power Of Attorney: Do You Need One?
    Retirement

    Power Of Attorney: Do You Need One?

  5. Examples Of Using SWOT Analysis To Get ...
    Investing Basics

    Examples Of Using SWOT Analysis To Get ...

Trading Center