Qualified Retirement Plans

SEP (SIMPLIFIED EMPLOYEE PENSION)

SEP Plans provide a simplified method for employers to make contributions to a retirement plan
for their employees.  Instead of establishing a profit-sharing or money purchase plan with a trust, employers can adopt a SEP agreement and make contributions directly to an individual retirement account established for each eligible employee.     

• Easy to set up and operate  
• Administrative costs are low   
• Plan can have flexible annual contributions 

401(K) PLAN

A type of defined contribution plan that allows employee salary deferrals and/or employer  contributions.        

• Can have other retirement plans in addition to 401(k)
• Plan available to a business of any size
• Greater flexibility in contributions

PROFIT SHARING PLAN

A type of defined contribution plan which allows discretionary annual employer contributions.

• Can have other retirement plans in addition to a profit sharing plan
• Greater flexibility in contributions - contributions are strictly discretionary
• Can be used by a business of any size  

DEFINED BENEFIT PLAN

A type of plan that is funded primarily by the employer and whose contribution is actuarially determined.        

• Significant benefits possible in a relatively short period of time
• Employers can contribute (and deduct) more than under other retirement plans
• Plan can be used to promote certain business strategies by offering subsidized early 
  retirement benefits