SEP IRASIMPLE IRA
Easy to set up and maintain.Salary reduction contribution plan with littleadministrative paperwork.
Any employer.Any employer with 100 or fewer employees that doesnot currently maintain another retirement plan.
Set up plan using either IRS Form 5305-SEP or thePutnam prototype SEP agreement.Set up plan by completing IRS Form 5304-SIMPLE.
Contributionsto the plan
Employer contributions only. Prior year contributionsthrough tax ling deadline, plus extensions. Roth 401(k)after-tax contributions not available.Employee salary reduction and contributions andemployer contributions. Roth 401(k) after-taxcontributions not available.
25% of compensation or a maximum of $49,000(for 2011). Maximum compensation on which 2011contribution can be based is $245,000. Self-employedindividuals making “employer” contributions on theirown behalf are generally limited to a deductible amountthat is the lesser of 20% of net earnings after allowabledeductions, or $49,000.Employee: $11,500 in 2011 and thereafter. Additionalcontributions can be made by participants age 50 andover ($2,500 in 2011).Employer: Employer must contribute matchingcontributions equal to 100% of rst 3% of electivedeferrals or nonelective contribution equal to 2% ofcompensation not in excess of $245,000 (for 2011).
Employer decides whether to make contributions foreach year.Employee can elect how much to contribute frompay. Employer must make matching or nonelectivecontributions.
Must be oered to all employees who meet minimumage, service, and pay requirements. More liberalstandards may be adopted by the employer.Must be oered to all employees who meet minimumcompensation requirements. More liberal standardsmay be adopted by the employer.
Withdrawals permitted at any time subject to federalincome taxes; early withdrawals subject to tax andpotential penalty. No loans permitted.Withdrawals permitted at any time subject to federalincome taxes; early withdrawals are subject to tax andpotential penalty. No loans permitted.
Contributions are immediately 100% vested.Employer and employee contributions are immediately100% vested.
Full range of Putnam funds, including Asset Allocationfunds, RetirementReady® target-date funds, andAbsolute Return funds.Full range of Putnam funds, including Asset Allocationfunds, RetirementReady® target-date funds, andAbsolute Return funds.