What is a Simplified Employee Pension (SEP)?
A Simplified Employee Pension (SEP) or (SEP-IRA) provides business owners with a simplified method to contribute toward their employees’ retirement as well as their own.
- Contributions are made to an IRA set up for each plan participant and cannot exceed the lesser of:
- 25% of compensation paid during the year, or
- $53,000 for 2016
- Investment, distribution, and rollover rules are the same as traditional IRAs.