How do I set up a Simplified Employee Pension Plan (SEP) for employees of a startup or very small business?

Just a thought: Since an SEP is basically a tax advantaged savings or investment plan, starting with the IRS to discover the boundaries is a good step:
http://www.irs.gov/retirement/sponsor/article/0,,id=139828,00.html

Answered 1 year ago by Allen Hobbs CMA

A SEP IRA can be set up by many financial institutions, i.e., banks, investment firms. They are appealing for startups due to large contribution limits (up to $50,000), low administration, and flexibility, and are available for any size business. However, a SEP requires that all employees receive the same percentage distribution benefit from the employer, and does not allow the employee to make a contribution through their salary. Thus, they are more commonly used in sole proprietors/equal partnerships. If you would like additional information, please feel free to contact me.

Answered 1 year ago by Ryan Cain

You should start with your bank or there are several online brokers that you can use such as Vanguard or Fidelity. SEP, by their name Simplified, are very easy and basic to set up and fund. They are really just a traditional IRA that the employer can fund.

You do have to set up an IRA for each employee and have a written plan which any financial institution that handles SEP-IRA's can give you or you can use the model agreement from the IRS http://www.irs.gov/retirement/article/0,,id=111395,00.html.

You will give a copy of this to each employee along with the basic information on how your SEP is set up to operate.

Whatever financial institution you choose to work with should walk you through all the steps.

Answered 1 year ago by Wray Rives CPA CGMA