Client wants to rollover/transfer assets from a SEP into a 401(a) qualified plan. I'm getting the impression from research that this can't be done, but I can't get an exact cite that says "no" or "yes". Can it be done? If so or if not, please provide me with the cite.

I agree that it can't be done, under current law. Take a look at IRC section 408(d)(3)(A)(ii). That seems to limit rollovers to amounts from an employee's trust, as described in 401(a). Since SEPs are not trusts, I would think that rollovers are not permitted.

Hope this is of some help to you.

SEP-IRA assets may not be rolled over or transfered to a qualified plan. Although a SEP-IRA may be a trust, the trust in not of the type described in 401(a), that is, a qualified plan. Thus, a rollover or transfer ONLY to another IRA (or SEP-IRA if allowed by the sponsor) is permitted.

Am I correct in assuming that under EGTRRA it is now possible (starting in 2002) to roll from the SEP to a qualified plan?

Yes. Beginning 1/1/02, SEP can rollover to QRP.

TAG (Techincal Answer Group) mapped out all the possibilities - SEP to IRA, QRP, SIMPLE; QRP to 403(B), 457, SEP, SIMPLE, etc - and posted the chart on the Subscriber's Only section of their website (www.tagdata.com).

This is a superb chart; it is contain in the Reference Section on that site.

Just making sure we're all on the same page. A SEP-IRA cannot be rolled over into a 401K plan, however, a SEP has the ability to rollover into a QRP due to EGTRRA effective 1/01/2002.

I'm pointing out here that SEP-IRA's are different from SEP plans.


Thanks.

Bella :confused:

After 2001, a SEP-IRA can be transferred into the qualified 401(k)plan trust (but not into the SIMPLE-IRA component of such plan).

The plan/trust must specifically state that assets from a "traditional IRA" (which a SEP is) may be rolled over into it. While a QP does not have to accept rollover, it must state specifically from what types of plans/arrangements it will accept rollovers from.

Thus, conduit IRAs are still advisable to maintain the greatest degree of flexibility.