simplified employee pension plan

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Related to simplified employee pension plan: SEP-IRA

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.

References in periodicals archive ?
Neither ERISA nor IRC protections apply to assets held under individual retirement arrangements, simplified employee pension plans, government plans, or most church plans [ERISA sections 4(b) and 201; IRC section 401(a) and DOL Regulations section 2510.
Mini 401(k) Salary Reduction Simplified Employee Pension Plans (SAR-SEP)
Commending the ERSA, he said, "The original proposal would have consolidated 401(k), thrift, 403(b) and governmental 457 plans, as well as Salary Reduction Simplified Employee Pension Plans [SARSEPs] and Savings Incentive Match Plans for Employees [SIMPLE] IRAs into one simple account, which could be sponsored by any employer.
Individual retirement arrangements, such as traditional IRAs, Roth IRAs, SIMPLE IRAs, and simplified employee pension plans (SEPs).
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.
Your two main options are Keogh and Simplified Employee Pension Plans (SEPs).

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