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  • Small Business Retirement Specialist   800-638-3804

    This chart is a side-by-side comparison of small business retirement plan options—features, benefits, and requirements. For detailed plan information, simply click on the individual titles or call a T. Rowe Price small business retirement specialist at 1-800-638-3804.

    Plan Features T. Rowe Price
    SEP-IRA
    T. Rowe Price Individual 401(k) T. Rowe Price
    SIMPLE IRA
    T. Rowe Price
    401(k) for
    Small Businesses

    Who is it for?

    For self-employed individuals and business owners who wish to make contributions for employees at a low administrative cost

    For sole proprietors who want to make the highest contribution possible (for themselves and a working spouse)

    A low-cost, easy-to-administer plan for businesses with up to 100 employees or for self-employed individuals

    Generally, for employers with fewer than 1,000 employees who wish to offer a cost-effective 401(k) plan

    Key benefits

    Easy and inexpensive to set up and maintain

    Allows for the highest contributions in many cases

    Salary deferral plan with both employee and employer contributions

    Retirement plan with both employee and employer contributions, allowing sponsor and participant to maximize tax deductions and tax-deferred savings

    What is the maximum contribution (per participant)?*

    Employer Contributions
    25% of compensation**
    OR
    $52,000, whichever is less for tax year 2014

    Salary Deferrals
    100% of compensation** up to $17,500 in 2014 and $23,000 if age 50 or older

    Employer Contributions
    Up to 25% of compensation.**

    Salary deferrals plus employer contributions may not exceed $52,000 for tax year 2014 and $57,500 if age 50 or older

    Contributions are allowed for business owner and their working spouse

    Salary Deferrals
    Up to $12,000 in 2014 and $14,500 if age 50 or older

    Employer Matching
    Dollar-for-dollar match of salary deferrals, up to 3% of a participant's compensation***

    OR

    Employer Nonelective
    2% of each eligible employee's compensation**

    Salary Deferrals
    Up to $17,500 for 2014 and $23,000 if age 50 or older

    Employer Contributions
    In conjunction with salary deferrals. not to exceed $52,000 per participant in 2014

    What are the employee's options?

    Employer decides if contributions will be made year to year

    Employee decides whether to make pretax (and, if permitted, Roth after-tax) salary deferral contributions

    Employee can decide how much to contribute; employer must also make contributions

    Employee can decide how much to contribute; variety of options for structure of employer contributions

    May employees contribute?

    No

    Yes

    Yes

    Yes

    Is the plan subject to a vesting schedule?

    N/A

    No

    N/A

    Optional for the employer

    What are the annual fees?

    $20 account service fee for each mutual fund account with a balance below $10,000.

    $20 account service fee for each mutual fund account with a balance below $10,000.

    $20 account service fee for each mutual fund account with a balance below $10,000.

    Varies depending on service structure and plan economics

    What are the IRS filing requirements?

    Generally, none

    May require annual IRS Form 5500

    None

    IRS Form 5500

    Is the plan qualified?

    No, IRA based

    Yes (defined contribution)

    No, IRA based

    Yes

    What plan eligibility requirements can the employer choose to set?

    Age:
    no more than 21

    Earnings:
    $500 in 2014

    Years of Service:
    employed by the current employer in up to three of the past five years

    Age:
    no more than 21

    Earnings:
    no restriction allowed

    Years of Service:
    no more than one year

    Age:
    no restriction allowed

    Earnings:
    not to exceed $5,000

    Years of Service:
    no more than two years

    Various options generally based on age and service

    What is the plan setup deadline?

    Your company's tax filing deadline (including extensions)

    By the end of the initial plan year, generally
    December 31

    Generally, anytime prior to October 1 of each calendar year (for existing employers)

    By the end of the initial plan year, generally
    December 31

    May I still contribute to an IRA?

    Yes††

    Yes††

    Yes††

    Yes††

    *The maximum deductible contribution for federal income tax purposes.

    **Maximum amount of compensation that can be used in determining contribution is $260,000 for tax year 2014. This amount is increased periodically for inflation.

    ***May be as low as 1% in no more than two years out of five consecutive calendar years.

    The $20 account service fee will be waived for the following circumstances: Subscribe to electronic delivery of statements and confirmations (participants can subscribe to paperless delivery via the T. Rowe Price website once their account is established.); maintain an individual combined balance of $50,000 or more for all T. Rowe Price accounts (including mutual funds, Brokerage, Variable Annuity, and Small Business Retirement Plans); or qualify for T. Rowe Price Select Client Services based on higher asset levels of $100,000 or more. If the Participant Account is closed during the year, a $20 closeout fee will be deducted automatically from the proceeds of the total redemption. However, the closeout fee is waived when an account service fee was previously assessed to the participant for that year or when the proceeds are being used for a rollover, transfer or conversion to a T. Rowe Price retirement plan account or T. Rowe Price IRA account.

    ††Contributions may or may not be deductible.