Which of the following best describes a SEP?
A) The employer or employee establishes and employer contributes to a tax-favorable IRA.
B) The employer establishes a tax-favorable IRA for the employee.
C) The employee rolls over an existing IRA to his or her employer and the current employer continues contributions.
D) The employer creates a taxable IRA to which the employee must make a defined contribution.

Question

Quizplus · Accepted Answer

A SEP (Simplified Employee Pension) is a retirement savings plan that allows employers to establish an IRA (Individual Retirement Account) for their employees. The employer makes tax-deductible contributions to the employee's IRA, and the employee is responsible for managing the funds within the account. Therefore, choice A accurately describes a SEP, and is the best choice.

Which of the Following Best Describes a SEP