Simplified Employee Pension (SEP) Plan Definition

Introduction
Simplified Employee Pension (SEP)

A simplified employee pension (SEP) retirement plan, is a written plan that allows you to make contributions toward your own (if you are self-employed) and your employees’ retirement without getting involved in a more complex qualified plan.

Under a SEP, you make the contributions to a traditional personal retirement arrangement (called a SEP-IRA) set up by or for each eligible employee. SEP-IRAs are owned and controlled by the employee, and you make contributions to the financial institution – Insurance Company where your  SEP-IRA growing in value.

SEP-IRAs are set up for, at a minimum, each eligible employee (defined later). A SEP-IRA may have to be set up for a leased employee (defined earlier under Definitions You Need To Know), but does not need to be set up for non eligible excludable employees (defined later).

Retirement Income Estimator

•   ^{IRS Information on SEP  *  FAQ’s}