ERISA Benefits Law Desk ReferenceERISA Benefits Tech, LLC

Part 11 · Chapter 4

SEP, SIMPLE, and Small-Employer Plan Arrangements

Law stated as of October 3, 2026 · Multiple-Employer and Small-Employer Arrangements

Scope and status

This chapter covers the small-employer vehicles: SEPs and grandfathered SARSEPs, SIMPLE IRA plans, SIMPLE 401(k) plans, starter 401(k) and safe-harbor deferral-only 403(b) arrangements, the exclusive-plan and transition rules that connect them, the tax credits and the automatic-enrollment mandate that drive small-employer plan decisions, and State auto-IRA programs and their ERISA-preemption posture. MEP and PEP structure is covered in the other chapters of this Part, ADP/ACP and safe harbor 401(k) mechanics in Part 5 (Qualified Plan Testing, Eligibility, and Vesting), and distribution and rollover mechanics in Part 6 (Distributions, Loans, Rollovers, and RMDs). All dollar figures are 2026 amounts from Notice 2025-67 and must be re-verified for any other year.

Sections

Part A is shown in full. The other sections are listed by title; their text is available to subscribers.

Part A — Choosing the Vehicle

A1.The menu and what actually distinguishes the options

Part 11, ch. 4, § A1

For an employer with no plan, the realistic choices are a SEP (§408(k)), a SIMPLE IRA plan (§408(p)), a SIMPLE 401(k) (§401(k)(11)), a starter 401(k) (§401(k)(16)), a safe harbor 401(k), a conventional 401(k), or joining a MEP or PEP. Statute: Code §§408(k), 408(p), 401(k)(11), 401(k)(16), 401(k)(12)-(13). The differentiators that decide the question in practice are: whether the employer wants a mandatory employer contribution; the deferral ceiling available to owners and other HCEs; whether the arrangement is subject to ADP/ACP and top-heavy testing; whether there is a Form 5500 and audit obligation; and whether the employer wants fiduciary responsibility or is willing to pay to shed most of it. Practitioner consensus.

A2.ERISA status and the reporting consequence

Part 11, ch. 4, § A2

IRA-based arrangements are employee pension benefit plans under Title I but satisfy ERISA's reporting and disclosure obligations through alternative compliance — a SEP through the model form or a written notice, a SIMPLE IRA plan through the required annual notice and the trustee's chapter description — so there is no Form 5500. Statute: ERISA §§101, 104; Final reg: 29 C.F.R. §§2520.104-48, 2520.104-49; Statute: Code §408(l)(2). A plan covering only an owner (and spouse) with no common-law employees is not an ERISA-covered plan. A qualified one-participant plan files Form 5500-EZ only if its year-end assets, combined with the employer's other one-participant plans, exceed $250,000, or for its final plan year; an owner-only SEP or SIMPLE IRA has no Form 5500-series filing at all. Final reg: 29 C.F.R. §2510.3-3(b); Statute: Code §6058; Agency guidance — formal: Instructions for Form 5500-EZ. SIMPLE 401(k), starter 401(k), safe harbor, and conventional 401(k) plans are ordinary ERISA plans with Form 5500 obligations and the ordinary fiduciary regime. Statute: ERISA §§103, 404.

Part B — Simplified Employee Pensions (SEPs)

  1. B1Structure and documentsSubscribers
  2. B2EligibilitySubscribers
  3. B3Contributions and limitsSubscribers
  4. B4Top-heavy and coordinationSubscribers
  5. B5SARSEPsSubscribers
  6. B6Roth SEP contributionsSubscribers

Part C — SIMPLE IRA Plans

  1. C1Employer eligibility and the exclusive plan ruleSubscribers
  2. C2Employee eligibility and the annual noticeSubscribers
  3. C3Employer contributionsSubscribers
  4. C42026 deferral limitsSubscribers
  5. C5Distributions and the 25% penaltySubscribers
  6. C6Replacing a SIMPLE with a safe harbor 401(k) mid-yearSubscribers
  7. C7Roth SIMPLE contributionsSubscribers

Part D — SIMPLE 401(k) and Starter 401(k)

  1. D1SIMPLE 401(k)Subscribers
  2. D2Starter 401(k) and safe-harbor deferral-only 403(b)Subscribers

Part E — Credits and the Automatic-Enrollment Mandate

  1. E1The start-up cost creditSubscribers
  2. E2The employer contribution creditSubscribers
  3. E3The automatic-enrollment and military-spouse creditsSubscribers
  4. E4The §414A automatic-enrollment mandateSubscribers

Part F — State Auto-IRA Programs

  1. F1The mandates and the preemption postureSubscribers
  2. F2The exemption is the planning pointSubscribers

Part G — Correction and Cross-References

  1. G1Correcting SEP and SIMPLE failuresSubscribers
  2. G2When the small employer's answer is a MEP or PEPSubscribers

The first Part of each chapter is open to everyone. The remaining sections, with their authority and practice points, are available to subscribers and to clients of ERISA Benefits Law Group, PLLC whose engagement includes access.

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