This type of pension allows you to make contributions to your own retirement plan if you're self-employed, and to your employees' plan. You can make contributions if you're the head of an S-corporation or a C-corporation, as well.
A simplified employee pension is a written arrangement or program that allows an employer to contribute tax-deductible dollars toward an employee's retirement. A SEP may be established by a corporate or noncorporate employer. From an individual's perspective, a SEP has the administrative simplicity of an IRA, but also allows the employer to make contributions on the employee's behalf in addition to the employer's annual contribution limit.
Any traditional IRA designated to receive employer contributions under a Simplified Employee Pension (SEP) agreement set up by the employer. An employer may contribute up to $30,000 or 15% of an employee's compensation annually to each employee's IRA.
An individual retirement account arrangement for covered employees, subject to specific rules on contribution and eligibility. First authorized in 1979, SEPs simplify the administration and reduce the paperwork associated with many other types of pension plans. For this reason, they are especially attractive to smaller employers.
Pension plan in which the employer contributes to an Individual Retirement Account for each of its employees. The employee is vested immediately and pays no taxes on the employer's contributions. The contributions and all earnings on funds in the plan are tax-deferred until withdrawn.
A qualified retirement plan in which each eligible employee opens an IRA and the sponsoring employer makes tax-deductible contributions on the employees' behalf. SEPs enjoy the tax benefits of other qualified plans but have relatively simple administrative rules.
An individual retirement account or annuity that permits an employer (or individual, if self-employed) to contribute each year to an IRA up to the lesser of 15% of compensation or $30,000 to all qualified plan participants.
A Simplified Employee Pension plans (SEP) lets a self-employed person or business owner contribute up to 25% of annual earnings to a maximum of $44,000 per year for each eligible employee. Contributions are tax deductible and earnings growth is tax deferred.
In the United States, a pension plan in which an employer contributes money to an individual retirement account (IRA) for each employee covered by the plan. The IRA is owned by the employee, not the employer. A SEP is especially useful to employers who cannot afford the time or money needed to administer and maintain a more complicated pension plan. SEPs may also be used by self-employed persons.