I had a CPA try to tell me that if his client puts in a 3% safe harbor employer contribution into the SEP portion of his plan, then the ACP testing and minimum 50% participation rules are thrown out. This would then enable the owner to put in his $12,000 plus $2,000 catch up regardless of what any employees deferred !
These SAR SEPS are old plans and there is not much out there on them but I don't think he is correct. Any thoughts ? Thank you.

NO. CLIENT NEEDS A NEW ACCOUNTANT.

A SARSEP that is top-heavy must satisfy the top-heavy rules. A 3 percent nonelective contribution to all eligible employees would satisfy that rule. It would not eliminate the 125 percent ADP test or the 50 percent participation rate requirement. The top-heavy contribution is not taken into account when doing the ADP test. SEPs are very unforgiving and the client may owe a bunch of cummulative 6 percent taxes.

The common denominator seems to be zero, thus all contributions are excesses. If all eligible employees received 3 percent, then the SEP side is good to that extent (only).

Matters pertaining to SEPs can be found in the SIMPLE, SEP, and SARSEP Answer Book. CLICK:
SIMPLE, SEP, and SARSEP Answer Book