Small business owners who want to offer employees a retirement plan without obligation or hassle can use Simplified Employee Pension Plans (SEPs). SEP’s allow employers to set aside retirement funds for themselves and employees. They are a good choice for employers who want to offer employees a perk, but do not want to commit to giving the same sum every year.

SEP’s differ from other retirement funds in that employers are not required to contribute every year. Each year, depending on their financial state, employers decide whether to contribute and how much to contribute. The ability to choose is beneficial to business owners whose profits vary from year to year.

SEP’s are easy to operate. No documents have to be filed with the government, and administrative costs are low. Sole proprietors, partnerships, and corporations can set up SEP’s. Once employers have chosen the amount to give, they have to provide the same amount to each and every employee.

Employers are required to do minimal work to run the plans. At the outset, they choose a representative of a financial institution as an account trustee. That trustee is then responsible to receive and invest contributions, and send statements to employees. Employers have to only choose the amount of the contribution, and send it to the trustee.

Business owners who are interested in offering SEP’s should consult with a retirement professional to learn the detailed requirements. As retirement plans go, SEP’s get points for ease of use and financial flexibility.