A SEP allows employers to establish SEP-IRAs for all eligible
employees, including owner employees. The employer must contribute
a uniform percent of pay for each employee - the current maximum is
15% or $30,000, whichever is less. Contributions are deductible to
the employer.
Participants are always 100% vested in the SEP-IRA account. The
participant has complete investment control of the SEP-IRA.
Because there are minimal requirements to establish the SEP-IRA,
and no reporting requirements, they are very inexpensive plans to
maintain.