Difference between revisions of "Salary Reduction Simplified Employee Pension Plan"

From Bogleheads
Jump to navigation Jump to search
m (Text replace - "<table cellspacing="0" class="navbox" style="border-spacing:0;;"><tr><td style="padding:2px;"><table cellspacing="0" class="nowraplinks collapsible autocollapse navbox-inner" style="border-spacing:0;background:transparent;color:inherit;;")
(Spell out acronym on first use, add article link, remove spaces before references)
Line 1: Line 1:
 
{{Employer provided retirement plans sidebar}}
 
{{Employer provided retirement plans sidebar}}
  
A '''{{PAGENAME}}''' is a simplified employee pension (SEP) plan set up before 1997 that includes a salary reduction arrangement. Under a SARSEP, employees can choose to have the employer contribute part of their pay to their Individual Retirement Account or Annuity (IRA) set up under the SARSEP (a SEP-IRA). A SARSEP may not be established after 1996. However, for SARSEPs set up before 1997, eligible employees hired after 1996 must be allowed to participate. <ref>[http://www.irs.gov/retirement/participant/article/0,,id=151277,00.html Retirement Plans FAQs regarding SARSEPs]</ref>
+
A Salary Reduction Simplified Employee Pension Plan ('''SARSEP''') is a simplified employee pension ([[SEP]]) plan set up before 1997 that includes a salary reduction arrangement. Under a SARSEP, employees can choose to have the employer contribute part of their pay to their Individual Retirement Account or Annuity (IRA) set up under the SARSEP (a SEP-IRA). A SARSEP may not be established after 1996. However, for SARSEPs set up before 1997, eligible employees hired after 1996 must be allowed to participate.<ref>[http://www.irs.gov/retirement/participant/article/0,,id=151277,00.html Retirement Plans FAQs regarding SARSEPs]</ref>
  
The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) changed many of the Internal Revenue Code's requirements and limits for qualified plans and IRAs. If a model SARSEP plan was used, an updated model plan should have been adopted by the end of 2002 to take advantage of new law changes. <ref>[http://www.irs.gov/retirement/participant/article/0,,id=151277,00.htmlRetirement Plans FAQs regarding SARSEPs]</ref>
+
The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) changed many of the Internal Revenue Code's requirements and limits for qualified plans and IRAs. If a model SARSEP plan was used, an updated model plan should have been adopted by the end of 2002 to take advantage of new law changes.<ref>[http://www.irs.gov/retirement/participant/article/0,,id=151277,00.htmlRetirement Plans FAQs regarding SARSEPs]</ref>
  
 
==External links==
 
==External links==

Revision as of 23:22, 15 December 2014

A Salary Reduction Simplified Employee Pension Plan (SARSEP) is a simplified employee pension (SEP) plan set up before 1997 that includes a salary reduction arrangement. Under a SARSEP, employees can choose to have the employer contribute part of their pay to their Individual Retirement Account or Annuity (IRA) set up under the SARSEP (a SEP-IRA). A SARSEP may not be established after 1996. However, for SARSEPs set up before 1997, eligible employees hired after 1996 must be allowed to participate.[1]

The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) changed many of the Internal Revenue Code's requirements and limits for qualified plans and IRAs. If a model SARSEP plan was used, an updated model plan should have been adopted by the end of 2002 to take advantage of new law changes.[2]

External links

References