Why change a Money Purchase Plan to a SEP?
July 13, 2001
Subject: Tax ?
Date: Mon, 02 July 2001
From: Ray
Michael,
Why do you think that clients that have a Money Purchase Program, will want to change their pension plan to a SEP.
Thanks,
Ray
Answer
Date: Mon, 09 July 2001
Hello Ray,
Since the maximum profit sharing contribution is going up from 15% of compensation to 25% for 2002, some people may decide that's enough and they don't want to pay to maintain a separate money purchase pension plan.
However, since the overall limitation for defined contribution plans is increasing, some taxpayers may still find money purchase pension plans advantageous.
That's why I suggest consulting with a professional pension advisor when implementing changes under the new tax rules.
Good luck!
Mike Gray
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