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Personal Banking

Personal Banking

Simplified Employee Pension (SEP)

A SEP allows a business, including a sole proprietorship to make contributions toward an employee's retirement using traditional IRAs.

SEP IRAs are the individual retirement accounts or annuities into which the SEP contributions are deposited. A SEP IRA must be set up for each eligible employee and cannot be a Roth IRA or a SIMPLE IRA.

Advantages of a SEP for employers:

  • Tax benefits: employer contributions are tax deductible business expenses.
  • Flexibility: employers can decide how much to contribute, up to the IRS imposed limitations, or whether to contribute at all.
  • Ease: a retirement plan that's easier to set up and more economical to administer than a 401(K) plan.
  • Employer contributions: for tax year 2009 is either 25% of the first $245,000 of compensation or $49,000 whichever is less.

Advantages of a SEP for employees:

  • Tax benefits: contributions are excluded from employee's gross income. Contributions and earnings are tax free until withdrawn.
  • Retirement Plan: employees build retirement savings.
  • Contributed funds are not subject to a vesting schedule and are owned by the employee.

Eligible Employees:

  • At least 21 years of age.
  • Has performed service for you in at least 3 of the immediately preceding 5 years.
  • A self-employed individual who has earned income and a working business owner.
  • Employees who have earned at least $550 in tax year 2009 or $550 in 2010. This amount is subject to cost of living adjustments. View the COLA Increase Table for these adjustments.
  • Certain leased employees must be treated as "employees."
CentralNet Login

CentralNet Enrollment

For first-time login to CentralNet, use the password you selected when you opened your account.

If you do not have a password or have forgotten it, call 508-842-7400 or 800-527-1017.

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