Flashcards in Ch. 24 Simplified Employee Pension Deck (15):
Simplified Employee Pension
an employer-sponsored plan in which employer contributions are made to participating employees' IRAs
Contributions are much ____ than traditional IRAs
When is it indicated?
1. want simpler, less costly qualified plan
2. when it is too late to adopt a qualified plan since qualified plans must be adopted before the end of the plan year
only ____ can contribute
1. not complicated and inexpensive
2. portable benefits
3. funding flexibility
4. benefit from positive investment
5. before 1/1/97, permits salary reduction contributions by employees
6. can be adopted at any time up to the tax return filing date
1. not reliable as stand-alone retirement plan
2. annual contribution may be restricted to lesser amount
3. distributions do not qualify for the special 10 year averaging rule
employees are ___ vested
The plan must cover all employees who are at least ____ and have worked ____ out of the preceding 5 years
are part time employees included in the count?
contributions need not be made for employees whose earnings were less than ____
Are there minimum funding requirements?
the employer can make or omit contributions in any year ____ tax consequences
The plan can exclude _____ employees if retirement benefits have been the subject of good faith bargaining
how are distributions treated in a a SEP?
life a traditional IRA