Salary Reduction Simplified Employee Pension Plan (SARSEP)
A SARSEP is a Simplified Employee Pension (SEP) plan that:
- Was established before 1997.
- Permits employee salary reduction contributions.
- Meets the following participation requirements annually based on all eligible employees (even those hired after 1996):
- At least 50% of eligible employees must choose to make employee salary reduction contributions for the year.
- Had no more than 25 employees who were eligible to participate at any time during the preceding year.
- May need to be amended for current law changes.
Participate in a SARSEP Plan
Benefits of participation, plan contributions, effects of withdrawing money from the plan and more.
Operate and Maintain a SARSEP Plan
Periodically review the plan, update for recent law changes, nondiscrimination testing requirements and more.
Correct SARSEP Plan Errors
Find, fix and avoid plan errors.
Terminate a SARSEP Plan
Requirements for ending a SARSEP plan.
- See Resources - IRA-Based Plans for forms, publications, frequently asked questions, etc.
- SARSEP Checklist
It is important to review the requirements for operating your SARSEP every year.
- SARSEP Fix-It Guide, Common Problems, Real Solutions
Tips on how to find, fix and avoid common mistakes in SARSEP plans.
- SARSEP Frequently Asked Questions
- SARSEP Plan Audits Reveal Common Failures