Hi,
I am trying to remember the rules on which employees a SEP IRA must cover and I don't have my ERISA outline book to refer to (ouch).

Can someone refresh my memory? Must the SEP be offered to all employees? I seem to recall it must cover all employees who have worked 2 out of the last five years, or something to that affect?

Please let me know.
Many thanks!

All employees who work three of the five preceding years must be allowed to participate in the SEP. Employees who earn less than $450 for the year, employees under age 21, non-resident aliens and employees under a collective bargaining agreement may be excluded.


For SEP IRA purpose, a years of service is any period , however, short. For instance, if the employee worked one week of the year, that is considered one year of service.

The employer may use less rigid eligibility requirements , for instance reducing the years-of-service, age or compensation requirements.