No. of Recommendations: 1
SEPs require no outside administration. In fact there is nothing that is filed with the IRS. Your employer simply fills out Form 5305 for your records and the companies. There are several low cost providers, TDWATERHOUSE, AMERITRADE, ETC.

Money purchase plans do require outside administration and are subject to ERISA rules (govern retirement plans). I'm not an expert but it would not surprise me if it is against ERISA for an employee to bear the administrative costs.

Most importantly, money purchase & SEP plans are funded with employer contributions, a fixed percentage of each eligible employee's salary. An employee can not choose to not participate.
--> SEP the percentage can fluctuate.
--> MP percentage is fixed.

There are not different "types of SEP" anymore. SARSEPs can not longer be started, only existing ones can continue to be funded.

FWIW, SIMPLE-IRAs require little in the way of administrative costs, also. One can defer 8k in salary in 2003 in addition to funding a Roth.

buzman




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