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Appendix C Part II Schedule 3 SEPs And SARSEPs 3 - Official Federal Forms
| Appendix C Part II Schedule 3 SEPs And SARSEPs Form. This is a national form and can be used in Department Of Treasury . |
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APPENDIX C PART II, SCHEDULE 3 SEPs and SARSEPs Plan Name: _________________________________ EIN: _______________ Plan #: _____ (Please include the plan name, Applicant's EIN, and plan number information on each page of the submission.) Instructions: This Schedule 3 is available for Simplified Employee Pension plans (SEPs), including SEPs that include salary reduction arrangements (i.e. Salary Reduction Simplified Employee Pension plans (SARSEPs)). SECTION I. IDENTIFICATION OF FAILURE(S) AND PROPOSED METHOD(S) OF CORRECTION The following failure(s) occurred with respect to the plan identified above. Check the failure(s) that apply. Within each failure, check applicable boxes, and provide the information requested: A. Employer Eligibility Failure (SARSEPs only) The Plan Sponsor was not eligible to sponsor a SARSEP because the plan was established on _________________________________________________. (Plan Sponsors were not permitted to establish SARSEPs after December 31, 1996.) The plan was adopted by a Plan Sponsor who was (or subsequently became) ineligible to sponsor a SARSEP under the requirements of § 408(k)(6) because the Plan Sponsor (and, if applicable its related controlled group or affiliated service group employers) had more than 25 employees (including leased employees, if applicable) during the following plan year(s): ________________________________________________________________ The plan was adopted by a Plan Sponsor that became ineligible to sponsor a SARSEP under the requirements of § 408(k)(6) because, in one or more plan year(s), fewer than 50% of the employees eligible to participate in the plan elected to make salary reduction contributions. The failure occurred during the following plan year(s): ________________________________________________________________ Description of Proposed Method of Correction: All contributions ceased as of __________________ (insert date beginning no later than the date this VCP submission is filed with the Service). The Plan Sponsor will not permit any new salary reduction contributions to the plan. B. Failure to satisfy the deferral percentage test (SARSEPs only) At least one highly compensated employee ("HCE") deferred an amount which, as a percentage of compensation, was more than 125% of the average deferral percentage ("ADP") for all nonhighly compensated employees ("NHCEs") eligible to participate in the plan (§ 408(k)(6)(A)(iii)). -1American LegalNet, Inc. www.FormsWorkFlow.com Plan Name: __________________________________ EIN: _____________ Plan #: ______ The total excess deferrals for each affected plan year were as follows: Year Excess Deferrals Description of the Proposed Method of Correction: The Plan Sponsor has made (or will make) nonforfeitable contributions on behalf of all eligible NHCEs. Each eligible NHCE will receive a contribution equal to a uniform percentage of compensation. The uniform percentage is equal to the difference between the (1) ADP that would have been required for an HCE's deferral percentage to have passed the nondiscrimination test and (2) the actual ADP for NHCEs. (Example: In a particular plan year, an HCE defers 10% of compensation. The ADP for NHCEs for the same plan year is 5% of compensation. However, in order for the plan to pass the nondiscrimination test, the ADP should have been 8% of compensation. The corrective contribution on behalf of each eligible NHCE will be equal to 3% of compensation.) The corrective contribution made on behalf of each NHCE will also be adjusted for Earnings. Earnings will be calculated from the last day of the plan year for which the failure occurred through the date of the corrective contribution. The corrective contribution (adjusted for Earnings) will be made to each affected NHCE's SARSEP IRA account. If an affected employee does not have a SARSEP IRA account, a SARSEP IRA account will be established for that employee. Earnings will be calculated for an affected NHCE's account on the basis of one of the following methods: (check one): Actual investment results of the affected NHCE's SARSEP IRA account. The interest rate incorporated in the Department of Labor's Voluntary Fiduciary Correction Program Online Calculator ("VFCP Online Calculator") (http://www.dol.gov/ebsa/calculator/main.html), since the actual Earnings of the affected NHCE's SARSEP IRA account cannot be ascertained. Actual investment results for years in which data is available, or the rate incorporated in the VFCP Online Calculator for years in which the actual Earnings of the affected NHCE's SARSEP IRA account cannot be ascertained. The VFCP Online Calculator was or will be used for the following year(s): ______________________________________________________________________ -2American LegalNet, Inc. www.FormsWorkFlow.com Plan Name: __________________________________ EIN: _____________ Plan #: ______ The total corrective contribution (before adjusting for Earnings) on behalf of the affected NHCEs for each plan year is as follows: Year Corrective Contribution Former employees affected by the failure (check one): There are no former employees affected by the failure. Affected former employees (or if deceased, their estate or known beneficiary) will be contacted, and corrective contributions will be made to their SARSEP IRA accounts. To the extent that an affected former employee or beneficiary cannot be located following a mailing to the last known address, the Plan Sponsor will take the actions specified below to locate that employee or beneficiary: After such actions are taken, if an affected employee or beneficiary is not found but is subsequently located on a later date, the Plan Sponsor will make corrective contributions to the affected SARSEP IRA account at that time. C. Failure to Make Required Employer Contributions (SEPs or SARSEPs) The Plan Sponsor failed to make employer contributions on behalf of eligible employees as required under the terms of the plan. The failure occurred on account of the erroneous exclusion of eligible employees. Other (describe): __________________________________________________ ________________________________________________________________ The failure occurred for the following plan year(s): ______________________________ -3American LegalNet, Inc. www.FormsWorkFlow.com Plan Name: __________________________________ EIN: _____________ Plan #: ______ Description of the Proposed Method of Correction: The Plan Sponsor has contributed (or will cont
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