Simplified Employee Pensions (SEPs) and SIMPLE Plans

SEP vs. Keogh

How do you decide if you should establish a SEP or a Keogh? You must compare both types of plans and determine which retirement plan best fits your needs. Here is a chart summarizing the key features of SEPs and Keoghs:

Key Features of SEPs and Keoghs

 

Features / Provisions

SEP

Keogh

Plan document

One-page form can be used: IRS Form 5305-SEP

Full plan document

Maximum contribution

Maximum employer deduction

Lesser of $53,000 in 2015 ($52,000 in 2014) or 100% of compensation per employee.

25% of total eligible compensation of employees covered by the plan.

Loan provisions

Cannot borrow against SEP account

Able to borrow against Keogh account

Eligibility

Less restrictive rules for employee eligibility

More restrictive rules for employee eligibility

When to establish

Have until due date of tax return to establish

Must be established by December 31

Annual reporting requirements

None

Annual reporting requirement on Form 5500

Share Article:
Add to GooglePlus
*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a Registered Broker-dealer (Member FINRA/SIPC) and SEC-registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. General Electric Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.