Hi,

I am a self employed individual with 1 employee, and have been in business for about 1.5 years.
I spoke with Vanguard but they didn’t know the answer to this question.

I plan to open a SEP IRA and do not want to contribute to my employee’s account.

Is it legal to fire my current employee, and hire a new employee while creating a SEP IRA requirement of working for the company for at least 1 year? I understand I’ll have to contribute to my fired employee’s account for the months she worked for this year.

My main question is, once my new employee almost hits the 1 year mark (which will make her eligible for SEP IRA), can I change the SEP IRA restrictive requirement from working for the company for 1 year to 2 years? Thus making her ineligible.

Thank you in advance.

Best,
Alex