Salary Reduction Simplified Employee Pension Plan (SARSEP)
What is it? A tax-deferred retirement plan for sole proprietors or businesses with fewer than 25 employees. Employees elect to defer portions of their salaries, which the employer deposits into the SARSEP. Employee contribution limits for 1999 are 15% of compensation to a maximum of $10,000. Going forward that amount is indexed for inflation. Other than the higher contribution limits, these plans follow IRA rules. Plan participants are also eligible for SEP-IRAs and IRAs. Replaced by SIMPLE-IRAs, SARSEPs could not be established after 1996.Added By: Natalie
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