SEP IRA Retirement Plan Rules
The Simplified Employee Pension IRA is a retirement plan which is set up by the employers or self-employed individuals. Generally, it is the basic retirement plan option for the small businesses and provides benefits to owners as well as employees. A name Simplified Employee Pension Plan implies itself that its plan set up by employers to provide employees easy retirement plan benefits and participation.
How to Establish SEP IRA?
Here are some steps describe which help you to establish a SEP IRA as prescribed below:
First of all, you should consult with the representative of the financial institute which provides retirements plans and selects the retirement plan SEP. You should file a Form 5305-SEP and other documents offered by the financial institutions. Provide all necessary information in the form include the name of your employer, employee participation details, a signature of the responsible officer, etc.
After completion of the form filling, you are not required to submit it to IRS. It becomes the legal document. It describes employee’s rights and benefits. Give a copy of Form 5305-SEP to your employees along with its instructions. The model of SEP would not consider adopted until employees provide their written statement.
Once the plan has set up successfully it is easy to operate it. You are required to appoint the trustee as he would take care of IRA investments, depositing the contributions, annual statements and any other necessary filing with Internal Revenue Service (IRS).
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