|
Simplified
Employee Pension (SEP)
A Simplified Employee Pension (SEP) is a written arrangement (a plan) that allows an employer to make contributions toward his or her own (if a self-employed individual) and employees' retirement, without becoming involved in more complex retirement plans. The contributions are made to IRAs (SEP-IRAs) of the participants in the plan. An employer can use Form 5305-SEP to satisfy the written arrangement requirement for a SEP. A SEP can be established at any time during a year. However, the time for making contributions for a year under a SEP agreement is limited.
Under a SEP, you, the employer, make contributions to traditional IRAs (SEP-IRAs) set up for each of your eligible employees. A SEP is funded solely by employer contributions. Each employee is always 100% vested in (or, has ownership of) all money in his or her SEP-IRA.
|
