408(k) plan

Definition

A simpler alternative to a 401(k) plan available only to companies with 25 or fewer employees, which gives employees the opportunity to make contributions to their SEP accounts with pre-tax dollars and reduce their current year's net income. also called 408(k) plan. also called Salary Reduction Simplified Employee Pension (SARSEP) Plan.

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403(b) plan Salary Reduction Simplified Employee Pension Plan