A SEP is a Simplified Employee Pension plan. Because this is a simplified plan, the administrative costs should be lower than for other, more complex plans.  Under a SEP, employers make contributions to traditional Individual Retirement Arrangements (IRAs) set up for employees, subject to certain percentage-of-pay and dollar limits.

To establish a SEP, you:

• Can be a business of any size, even self-employed.
• Adopt Form 5305-SEP, a SEP prototype or an individually designed plan document.
• Cannot have any other retirement plan (except another SEP) if the model Form 5305-SEP is used to establish the SEP.

A SEP has a life cycle with four distinct stages. This page offers a basic understanding of the life cycle of a SEP.

• Choosing a SEP
• Establishing a SEP
• Operating a SEP
• Terminating a SEP

See the SEP Resource Library for forms, publications, frequently asked questions, etc.