SEP Plans

Simplified Employee Pension (SEP) plans can provide a significant source of income at retirement by allowing employers to set aside money in retirement accounts for themselves and their employees. A SEP does not have the start-up and operating costs of a conventional retirement plan and allows for a contribution of up to 25 percent of each employee’s pay.

• Available to any size business
  
• Easily established by adopting Form 5305-SEP, a SEP prototype or an individually designed plan document
  
• If Form 5305-SEP is used, cannot have any other retirement plan (except another SEP)
  
• No filing requirement for the employer
  
• Only the employer contributes
  
• To traditional IRAs (SEP-IRAs) set up for each eligible employee
  
• Employee is always 100% vested in (or, has ownership of) all SEP-IRA money
  

Pros and Cons:

• Easy to set up and operate
  
• Low administrative costs
  
• Flexible annual contributions – good plan if cash flow is an issue
  
• Employer must contribute equally for all eligible employees
  

Who Contributes: Employer contributions only

Contribution Limits: Total contributions to each employee’s SEP-IRA are limited.

Filing Requirements: An employer generally has no filing requirements.

Participant Loans: Not permitted. The assets may not be used as collateral.

In-Service Withdrawals: Yes, but includible in income and subject to a 10% additional tax if under age 59 ½.

Call Shelly Dodge at 972/539-0002 today to schedule a complimentary consultation to discuss your investment options and to determine if a SEP is right for you.