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.


Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
Live Video Event Monday!
The GP team is hosting a live video event on Monday at 4 p.m. ET. Don't worry if you can't make it — we'll have a replay and a transcript. Click for more!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.