Legal Dictionary of Pakistan

simplified employee pension plan

An individual retirement account or annuity established for an employee and funded by employee contributions and by discretionary contributions from the employer. ( A simplified employee pension plan operates much like a 401(k) plan, in that the employee contributions can be made by deferred compensation and the employer can contribute. But the plan is attractive to small employers because it is much easier to administer than a 401(k) plan and gives the employer complete discretion on whether to make an annual contribution. IRC (26 USCA) § 408(k). -Abbr. SEP.