Model Simplified Employee Pension Plan

A simplified employee pension plan is usually one of the easiest and least expensive ways for a small employer to provide employees with a retirement plan. Although a SEP is generally regarded as one of the simplest forms of retirement plans, it is still subject to complex — and sometimes confusing — regulations. A small business owner is faced with a surprising number of obligations regarding contributions, tax deductions, record keeping, employee notification, etc.

The attached file contains a sample simplified employee pension plan that illustrates the essential elements of a SEP. The plan is intended as a sample, and not as plan document that can be used, without modification, as your plan document. It may serve as a starting point in drafting a plan document that suits your particular needs. Or it might serve as a launching point for discussions with your attorney regarding the advisability and features of a plan that you might choose to offer. In any event, understanding what is required of you, and what must be contained in a plan document, will save you time and money in deciding whether to offer a plan and, if so, what the plan will provide.


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