Simplified Employee Pension Plans (SEP IRAs) are a low cost retirement plan solution designed for self-employed individuals and small business owners. Similar to Profit Sharing Plans, SEP IRAs are funded solely by the employer and provide the flexibility of discretionary contributions. They offer higher contribution limits associated with larger retirement plans but with minimal plan administration.

In addition, in SEP IRAs, employers may be able to integrate their plan with Social Security which can result in higher proportionate contributions for employees earning above the social security wage base.

Who Qualifies

Designed for corporations, partnerships, sole proprietorships or self-employed individuals with earned income.

Plan Features

Employee coverage requirements

  • Must include employees age 21 and older with two or more years of service and earned income of at least $600 annually.
  • Worked three out of the proceeding five years.
  • Employer may set less restrictive requirements.
  • May exclude:
    • Union employees.
    • Nonresident aliens with no U.S. income.


  • Immediate 100% vesting in contributions.

Funding the SEPIRA and contribution limits for 2018
This plan is funded solely by the employer. The maximum contribution permitted is the lesser of 25% of eligible compensation or 20% for self-employment income not to exceed $55,000 which is based on a maximum salary of $275,000. Tax deductible employer contributions must be made by your company’s tax-filing deadline, including extensions.


  • Loans and hardship distributions are not permitted.
  • Withdrawals are permitted after a triggering event occurs: retirement, termination of service, death or disability.
  • Generally withdrawals are penalty-free after age 59 ½. Certain exceptions may apply; see IRS Publication 590-B for additional information.

Employer’s responsibility

  • No annual filings for the plan.
  • Annual Top Heavy Testing required.


OppenheimerFunds is a high conviction global leader in asset management with a history of providing long-term innovative investment strategies, combined with intelligent risk taking, to help meet investors’ needs.

Administrative fees

  • No plan installation fees.
  • Low annual maintenance fee per participant 1:
    • $25 for account balances under $50,000.2
  • Fund expenses apply.

Next Steps

To get started, complete the SEPIRA Employer Guide and SEPIRA Participant Guide by tax filing deadline.

To learn more, please call 800 255 275 to speak with your Regional Advisor Consultant.

1Other account-related fees (if applicable), and fund expenses apply.

2The fee will be waived if the total investments in Oppenheimer funds retirement and/or nonretirement accounts, excluding OppenheimerFunds direct-sold 529 plans, is $50,000 or more.