Common use of Instructions to the Employer Clause in Contracts

Instructions to the Employer. Simplified Employee Pension.-A SEP is a written arrangement (a plan) that provides you with a simplified way to make contributions toward your employees' retirement income. Under a SEP, you can contribute to an employee's individual retirement account or annuity (IRA). You make contributions directly to an IRA set up by or for each employee with a bank, insurance company, or other qualified financial institution. When using Form 5305-SEP to establish a SEP, the IRA must be a Model IRA established on an IRS form or a master or prototype IRA for which the IRS has issued a favorable opinion letter. Making the agreement on Form 5305- SEP does not establish an employer IRA described in section 408(c). When Not To Use Form 5305-SEP.-Do not use this form if you:

Instructions to the Employer. Simplified Employee Pension.-A Pension.—A SEP is a written arrangement (a plan) that provides you with a simplified way to make contributions toward your employees' ’ retirement income. Under a SEP, you can contribute to an employee's ’s individual retirement account or annuity (IRA). You make contributions directly to an IRA set up by or for each employee with a bank, insurance company, or other qualified financial institution. When using Form 5305-SEP to establish a SEP, the IRA must be a Model IRA established on an IRS form or a master or prototype IRA for which the IRS has issued a favorable opinion letter. Making the agreement on Form 5305- 5305-SEP does not establish an employer IRA described in section 408(c). When Not To Use Form 5305-SEP.-Do SEP.—Do not use this form if you: