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SEP—Simplified Employee Pension Plan
Van Kampen's SEP Plan offers owners of small- and
medium-sized businesses an opportunity to invest for retirement with one
of the least complicated and flexible retirement plans available today. The business
contributes directly to an individual SEP-IRA account for the owner and
each eligible employee. A SEP may be appropriate for sole proprietors,
partnerships and corporations.
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Easy to Establish: A pre-approved IRS Form and IRA application
for each participant of the Van Kampen plan.
Easy to Maintain: Generally no annual government filings are
required as long as certain disclosure requirements are met.
Cost-effective Solution: IRA administration fee of $15 paid by each participant for the
Van Kampen plan.
Flexible Contributions Made by the Business: Contributions made
at the discretion of the employer and may
be changed from year to year. The employer may also choose to not make
a contribution in a given year.
Employee Eligibility: Every eligible employee will be allowed to participate in a SEP. As the
employer, however, you have the option to restrict employee eligibility
based on the following criteria:
- Age. An employee must be 21 years or older to participate.
- Compensation. An employee must earn at least $500 for 2007 and 2008 in compensation
in the year a contribution is being made.
- Service. An employee must have worked any three of the immediately
preceding five calendar years in order to participate.
Contributions and deductibility: You’ll also need to be aware of a few rules governing contributions:
- Deductible-contribution limit. You can contribute up to 25 percent of
an eligible employee’s compensation, $45,000 for 2007 and $46,000 for 2008
(whichever
is less)1, to the employee’s account annually, and earn a deduction on
that amount. While you may contribute more than 25 percent (up to
100 percent of compensation or $45,000 for 2007, whichever is less), you will
not be eligible for a deduction above the 25 percent limit. If you are self-employed and contribute to your own SEP IRA account, special rules apply when figuring your maximum deduction.
1 This amount is subject to annual cost-of-living adjustments.
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