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

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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>
 
  
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>
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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>
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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>
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==References==
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{{Reflist|30em}}
  
 
==External links==
 
==External links==
*[http://www.irs.gov/retirement/participant/article/0,,id=151277,00.html Retirement Plans FAQs regarding SARSEPs]
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*IRS, [http://www.irs.gov/Retirement-Plans/Operating-a-SARSEP Operating a SARSEP]
*[http://www.irs.gov/retirement/article/0,,id=117337,00.html Choosing a Retirement Plan: SARSEP]
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*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.
*[http://www.irs.gov/retirement/article/0,,id=117340,00.html Operating a SARSEP]
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*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.
  
==References==
 
<references/>
 
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[[Category:Glossary]]
 
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[[Category:Employer Provided Retirement Plans]]
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[[Category:Employer provided retirement plans]]

Latest revision as of 12:10, 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

  1. IRS, Salary Reduction Simplified Employee Pension Plan (SARSEP), viewed December 15, 2014.
  2. IRS, Retirement Plans FAQs regarding SARSEPs, viewed December 15, 2014.

External links