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SIMPLIFIED EMPLOYEE PENSION (SEP) 

Simplified Employee Pension (SEP) plans offer employers a relatively inexpensive method of providing retirement benefits for employees.  A SEP plan is a retirement plan established by an employer to provide retirement benefits for employees.  The plan must be operated and administered in a manner that does not discriminate in favor of highly compensated employees.  Under the SEP plan agreement, SEP/IRA contributions are made by the employer directly into the IRA of each eligible employee. 

Generally, any type of business can establish a SEP- from unincorporated to incorporated businesses, including tax-exempt organizations and governmental units.  However, if a business is member of controlled group of corporations, a group of trades or businesses under common control, or affiliated services group, the SEP must be established for all members of  the group for it to be valid for any member of the group.