Benefits for the Employee
Unlike other plans that require "vesting," a SEP is under the control of each employee—subject to the same regulations as an IRA—right from the first dollar of employer contribution.

A SEP is in addition to an IRA, even if the employer is making IRA contributions. SEP deposits can be made on an anytime-frequency basis—from weekly to lump sum.

Funds can begin to be withdrawn by the employee at age 59½, whether retired or not. Mandatory withdrawals do not begin until age 70½. Funds can be withdrawn earlier, subject to a 10% IRS penalty.

Benefits for the Employer
As an employer, a SEP may be the easiest, most attractive employee benefit you can offer. You have total flexibility in determining the annual amount or percentage contribution—from 0% to 15% of each participating employee's annual earned income (up to $30,000).

Employer contribution to SEPs are treated as a business expense in the calendar year, and can be made until April 15th. Employer contributions to employee IRAs are unaffected by a SEP. All employees over 21 years of age, who have worked for the organization for three of the last five years, must be covered. The elected percentage contribution must be applied to each eligible employee's earned income.

Getting Started With Your SEP
We'd like to answer any questions you might have about SEPs, and help you establish the SEP plan that's best suited to your and your employee's needs.