Help Your Employees Meet Their Retirement Goals with a SEP IRA - Simplified Employee Pension (SEP) IRA plans
A SEP IRA Plan could work for your Business.
Simplified Employee Pension (SEP) IRA plans are an excellent way to help your employees get a head start on retirement savings. Eligible employees establish SEP IRAs, to which tax-deductible contributions are made by the employer. A SEP IRA is a valuable resource that can help you with recruiting and retaining employees.
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SEP IRA Plan Features
- Sole proprietorships, partnerships, limited liability companies (LLCs), or incorporated businesses, including subchapter S corporations, can establish a SEP IRA plan.
- All eligible employees must be allowed to participate.
- All plan contributions are 100% vested immediately.
- The deadline to establish a SEP IRA is the business' tax-filing deadline, including any extensions.
- Any investment earnings grow tax-deferred until withdrawn.
- Generally, a 10% tax penalty on distributions applies to participants under age 59½. Participants will have to pay federal income tax on the distributions.
Employee Eligibility
- Any employee who is at least 21 years old and has performed any service for the employer in up to 3 of the immediately preceding 5 years.
- Union employees and non-resident aliens who have no U.S. source of income may generally be excluded from coverage.
- Less restrictive eligibility requirements can be established.
Benefits for Business Owners
- Annual contributions are not required.
- The contribution percentage can vary each year, from 0 to 25% of compensation, up to a maximum of $53,000 in 2015 per participant for each year. The same percentage of compensation generally must be contributed for all eligible employees, including the owner-employee.
- Employer contributions are tax deductible for the employer – up to 25% of all participants' compensation.
- There's no setup or annual costs to operate a SEP IRA plan.
- Fast and easy to set up and operate – there are no annual reports to file with the IRS.
- The plan can be funded with State Farm Mutual Funds® or a State Farm® Annuity.
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Risk Disclosures
Investing involves risk, including potential for loss.
A 10% tax penalty may apply for withdrawals from tax-qualified products before age 59½.
Mutual Funds Disclosure
General
Automatic investment plans do not assure a profit or protect against loss.
Neither State Farm nor its agents provide investment, tax, or legal advice.
It is not possible to invest directly in an index.
State Farm VP Management Corp. is a separate entity from those State Farm entities which provide banking and insurance products.
As of June 2, 2010, additional fees may apply to certain accounts with balances less than $5000.
Each State Farm LifePath Fund invests its assets in a combination of equity (including real estate investment trusts) and bond exchange traded funds and a money market fund (the "Underlying Funds") in proportion to the Fund's own comprehensive investment strategy. BlackRock Fund Advisors ("BFA") serves as the sub-advisor to the LifePath Funds and selects investments for the Fund. State Farm Investment Management Corp. (SFIMC) is the investment advisor to the State Farm LifePath Funds. State Farm VP Management Corp. (SFVPMC) is the distributor of the State Farm LifePath Funds. Neither SFIMC nor SFVPMC are affiliated with BFA or its affiliates.
BFA is a wholly owned subsidiary of BlackRock Institutional Trust Company, N.A. ("BTC"). Neither BTC nor its affiliates are affiliated with SFIMC or SFVPMC.
BlackRock Fund Advisors ("BFA") is the investment sub-advisor to the S&P 500® Index Fund, the Small Cap Index Fund, and the International Index Fund.
Ascensus provides recordkeeping and administrative services for 401(k) retirement plans offered by State Farm Investment Management Corp.
Net Asset Value (NAV) is calculated by adding all of the assets of a Fund, subtracting the Fund's liabilities, then dividing by the number of outstanding shares.
Indices
The Russell 2000® Index tracks the common stock performance of the 2,000 smallest U.S. companies in the Russell 3000 Index.
The Russell 2500 Index measures the performance of the 2,500 smallest securities in the Russell 3000 Index.
The Russell 1000 Index is a market-capitalization weighted index that tracks the largest 1,000 companies in the Russell 3000 Index.
The Russell Midcap Index measures the performance of the mid-cap segment of the U.S. equity market and is a subset of the Russell 1000 Index.
The Dow Jones Industrial Average is an unmanaged average of 30 actively traded stocks.
The NASDAQ Composite is an unmanaged market capitalization weighted index that is designed to represent the performance of the National Market System.
The S&P 500® Index tracks the common stock performance of 500 large U.S. companies.
The Barclays 1-5 Year U.S. Treasury Index measures the performance of short-term U.S. Treasury Securities maturing within one to five years.
The Barclays U.S. Aggregate Bond Index represents debt securities in the U.S. investment grade fixed rate taxable bond market.
The Barclays Municipal Bond Index is an unmanaged index representative of the tax-exempt bond market.
The Barclays High-Yield Bond Index covers the U.S. dollar-denominated, non-investment grade, fixed-rate, taxable corporate bond market.
The Barclays U.S. TIPS Index is an unmanaged index composed of inflation protected securities issued by the U.S. Treasury.
The Citigroup 3-Month Treasury Bill Index is an unmanaged index of three-month Treasury bills.
The FTSE EPRA/NAREIT Developed Real Estate ex-U.S. Index is designed to measure the stock performance of companies engaged in specific real estate activities of the real estate markets outside of the United States.
The FTSE EPRA/NAREIT Developed Real Estate Index is designed to measure the stock performance of companies engaged in specific real estate activities of the North American, European, and Asian real estate markets.
The Morgan Stanley Capital International Europe, Australasia and Far East Free (EAFE® Free) Index currently measures the performance of stock markets of Europe, Australia, New Zealand, and the Far East.
The MSCI All Country World Index (ACWI) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets.
The MSCI All Country World Index (ex-U.S.) (MSCI ACWI ex-U.S. Index) is a free float-adjusted market capitalization index that is designed to measure equity market performance in global developed and emerging markets, excluding the United States.
The MSCI Emerging Markets Index is a float-adjusted market capitalization index designed to measure equity market performance in global emerging markets.
The New York Stock Exchange is considered the largest equities-based exchange in the world based on total market capitalization of its listed securities.
The Blended Benchmark for the Equity and Bond Fund is a combination of 60% of the S&P 500 Index and 40% of the Barclays U.S. Aggregate Bond Index, rebalanced monthly.
The blended benchmark for the LifePath Funds is a hypothetical representation of the performance of each of the underlying asset classes according to their weightings as of the most recent month end. For a list of the indexes used to calculate the blended benchmark, please refer to the Prospectus.
Trademarks
iShares, LifePath and LifePath followed by 2020, 2030, 2040 and 2050 are all registered trademarks of BlackRock Institutional Trust Company, N.A.
"S&P 500®" is a trademark of The McGraw-Hill Companies, Inc. and has been licensed for use by the State Farm Mutual Fund Trust. The State Farm S&P 500 Index Fund (the "Fund") is not sponsored, endorsed, sold or promoted by Standard & Poor's, and Standard & Poor's makes no representation regarding the advisability of investing in the Fund.
Russell Investment Group ("Russell") is the source and owner of the trademarks, service marks and copyrights related to the Russell 2000® Index. Russell® is a trademark of Russell. The State Farm Small Cap Index Fund (the "Fund") is not sponsored, endorsed, sold or promoted by, nor in any way affiliated with Russell. Russell is not responsible for and has not reviewed the Fund nor any associated literature or publications and Russell makes no representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise.
The EAFE® Free Index is a trademark, service mark and the exclusive property of Morgan Stanley Capital International, Inc. ("MSCI") and its affiliates and has been licensed for use by the State Farm Mutual Fund Trust (the "Trust"). The State Farm International Index Fund (the "Fund"), based on the EAFE® Free Index, has not been passed on by MSCI as to its legality or suitability, and is not issued, sponsored, endorsed, sold or promoted by MSCI. MSCI makes no warranties and bears no liability with respect to the Fund. MSCI has no responsibility for and does not participate in the management of the Fund assets or sale of the Fund shares. The Trust's Statement of Additional Information contains a more detailed description of the limited relationship MSCI has with the Trust and the Fund.
Non-US Residents
Each of the investment products and services referred to on the State Farm Mutual Funds web site is intended to be made available to customers or prospective customers residing in the United States. The customer's U.S. permanent residence address must be a street address. This web site shall not be considered a solicitation or offering for any investment product or service to any person in any jurisdiction where such solicitation or offer would be unlawful.
Business Continuity Plan
State Farm VP Management Corp. has developed a Business Continuity Plan on how we will respond to events that significantly disrupt our business. Since the timing and impact of disasters and disruptions is unpredictable, we will have to be flexible in responding to actual events as they occur. With that in mind, download this information on our business continuity plan [PDF-19.5KB].
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800-447-4930 Mutual Funds
888-702-2307 Variable Products
AP2015/04/1115
Not FDIC Insured
- No Bank Guarantee
- May Lose Value
