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Simplified Employee Pension Plan
(redirected from Simplified Employee Pension Plans)

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Simplified Employee Pension Plan
Also called a SEP IRA. A retirement plan designed for persons with self-employed income and their employees. It operates like an IRA: it has contribution limits and may be invested in securities. When an employer sets up an SEP, he/she creates a different account for each employee and puts a certain percentage of each person's income into these accounts. The percentage must be the same for the employer and all employees (although the dollar amounts will differ because of different levels of compensation). The employer makes all contributions, which are tax deductible for him/her; when the employee makes withdrawals upon retirement, the withdrawals are tax-free. SEPs may exist side-by-side with 401(k)s.

simplified employee pension plan (SEP)
A special type of joint Keogh plan-individual retirement account that is created for employees by employers and that permits contributions from each party. The SEP was developed to give small businesses a retirement plan easier to establish and administer than an ordinary pension plan.

Simplified employee pension plan (SEP). An SEP is a qualified retirement plan set up as an individual retirement arrangement (IRA) in an employee's name.

You can establish an SEP for yourself if you own a small business, or you may participate as an employee if you work for a company that sponsors such a plan.

The federal government sets the requirements for participation, the maximum annual contribution limits, and the rules governing withdrawals.



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The 30-minute, self-paced course discusses traditional, rollover, and Roth IRAs, explains basic IRA product features and benefits, contribution and distribution requirements, tax benefits, penalty calculations, new conversion rules, simplified employee pension plans and SIMPLE Retirement Accounts.
Self-Employed or Small Business Retirement Plans Simplified Employee Pension Plans (SEP) are available for small business owners to contribute to their individual and their employees' IRAs.
The exclusion does not apply to distributions made from simplified employee pension plans (SEPS) or Simple IRAs.
 
 
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