SEP Plan

A Simplified Employee Pension Plan (SEP) is an easy plan to implement as there are no annual filings or annual required disclosures from the employer. Employer contributions are discretionary and any employee who has been employed in 3 of the last 5 years, is at least 21 and has earned $600 is eligible to participate (indexed for inflation).
These plans were more popular when they allowed for participant deferrals. However, changes in the tax laws removed that component. Currently, only employer contributions are permitted for any new plans that are established. Therefore, the employee does not have the option to participate in the process of building their retirement account. For this reason, most employers now use other retirement plans that allow employee deferrals.

Selecting the best option for your company requires a great deal of thought and knowledge. The professionals at Northern Financial Management have the experience to help you design and implement the right plan. We would welcome the opportunity to discuss your current strategy and other possible options for your company!

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