Salary Reduction Simplified Employee Pension Plan: Difference between revisions
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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>IRS, [http://www.irs.gov/Retirement-Plans/Plan-Sponsor/Salary-Reduction-Simplified-Employee-Pension-Plan-SARSEP Salary Reduction Simplified Employee Pension Plan (SARSEP)], viewed December 15, 2014.</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>IRS, [http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-SARSEPs#3 Retirement Plans FAQs regarding SARSEPs], viewed December 15, 2014.</ref> | |||
==References== | ==References== | ||
{{Reflist|30em}} | |||
==External links== | |||
*IRS, [http://www.irs.gov/Retirement-Plans/Operating-a-SARSEP Operating a SARSEP] | |||
*IRS, [http://www.irs.gov/file_source/pub/irs-pdf/p4286.pdf SARSEP Checklist], It is important to review the requirements for operating your SARSEP every year. | |||
*IRS, [http://www.irs.gov/Retirement-Plans/SARSEP-Plan-Fix-It-Guide SARSEP Plan Fix-It Guide], Common Problems, Real Solutions, Tips on how to find, fix and avoid common mistakes in SARSEP plans. | |||
[[Category:Glossary]] | [[Category:Glossary]] | ||
[[Category:Employer provided retirement plans]] | |||
[[Category:Employer |
Latest revision as of 16:10, 10 December 2015
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]
References
- ↑ IRS, Salary Reduction Simplified Employee Pension Plan (SARSEP), viewed December 15, 2014.
- ↑ IRS, Retirement Plans FAQs regarding SARSEPs, viewed December 15, 2014.
External links
- IRS, Operating a SARSEP
- IRS, SARSEP Checklist, It is important to review the requirements for operating your SARSEP every year.
- IRS, SARSEP Plan Fix-It Guide, Common Problems, Real Solutions, Tips on how to find, fix and avoid common mistakes in SARSEP plans.