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What is a 'Simplified Employee Pension - SEP (Simplified Employee Pension IRA)'

A simplified employee pension (SEP) is a retirement plan that an employer or self-employed individuals can establish. The employer is allowed a tax deduction for contributions made to the SEP plan and makes contributions to each eligible employee's SEP IRA on a discretionary basis.

BREAKING DOWN 'Simplified Employee Pension - SEP (Simplified Employee Pension IRA)'

Contributions to SEP IRAs are immediately 100% vested, and the IRA owner directs the investments.

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