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simplified employee pension

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Financial Dictionary

Simplified Employee Pension - SEP (Simplified Employee Pension IRA)

A type of retirement plan that an employer can establish, including self-employed individuals. The employer is allowed a tax deduction for contributions made to the SEP Plan. The employer makes contributions to each eligible employee's SEP IRA on a discretionary basis.

Investopedia Commentary

Contributions to SEP IRAs are immediately 100% vested, and the IRA owner directs the investments.

Related Links

Plans the Small Employer Can Establish
Introductory Tour through Retirement Plans
Rules Regarding Substantially Equal Periodic Payment (SEPP)

See also: IRA, Roth IRA

Also spelled: SEP

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Legal Dictionary

Main Entry: simĀ·pliĀ·fied employee pension
Function: noun
: a pension that is funded by employer contributions or through a salary reduction arrangement and that places fewer administrative burdens on the employer than do other plans and allows employer deduction of contributions and employee withdrawal at any time called also SEP
Merriam-Webster's Dictionary of Law, © 1996 Merriam-Webster, Inc.
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