SERIES 6 ASKS ABOUT SEP PLANS AND SIMPLE PLANS

Taking the Series 6?  Make sure you know the difference between SIMPLE plans and SEP plans

SIMPLE stands for a "savings incentive match plan for employees."  It is permitted for companies only where there is not more than 100 employees.

SEP stands for "simplified employee pension."  There must be a written formal agreement to set one up.  The employer must establish a SEP-IRA account for each eligible employee.  For year 2013, an employer's contributions to his employee's SEP-IRA cannot exceed 25 percent of the employee's compensation or $51,000.

PS  Watch for Bob Eder's forthcoming book, Study for the Series 6 Exam.