simplified employee pension plan

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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Defined contribution plans (e.g., 401(k)s, 403(b)s, 457s, Simplified employee Pension plans, etc.)
This article focuses on the three most popular types of tax-favored retirement plans for small firms: simplified employee pension plans, commonly called "SEPs;" savings incentive match plans for employees of small employers, referred to as "SIMPLE IRAs" and "SIMPLE 401(k) plans;" and qualified profit-sharing plans.
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It is available only in individual retirement accounts or simplified employee pension plans.
Simplified Employee Pension Plans offer an uncomplicated alternative to traditional pension plans.
Instead, you will need to learn about tax-deductible vehicles such as Keogh plans and simplified employee pension plans, as well as the traditional individual retirement accounts.
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Additional project work will be supplemented by the Learn, Educate, Self-correct, Enforce (LESE) program; the Individual Retirement Arrangements program, which oversees payroll-deduction individual retirement accounts (IRAs), SEPs (simplified employee pension plans), SARSEPs (salary reduction simplified employee pension plans) and SIMPLEs (savings incentive match plans for employees); and the Form 5500-EZ Delinquent Filer Penalty Relief program for one-participant plans.
Individual retirement arrangements, such as traditional IRAs, Roth IRAs, SIMPLE IRAs, and simplified employee pension plans (SEPs).

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