Question

Which of these potential employers is most likely to implement a simplified employee pension (SEP) plan?

1. A large corporation with thousands of employees.
2. A small business with a few employees.
3. A government agency.
4. A nonprofit organization.

Answer 1

A small business with a few employees is the most likely to implement a simplified employee pension (SEP) plan due to its affordability and simplicity in administration.

Step-by-step explanation:

Among the entities listed, a small business with a few employees is most likely to implement a simplified employee pension (SEP) plan. SEP plans are usually more attractive for small businesses because they require less administrative overhead compared to traditional pension plans. Large corporations with thousands of employees, government agencies, and nonprofit organizations are more likely to implement either defined benefits or defined contribution plans like 401(k)s or 403(b)s which are designed to cover a larger number of employees and often involve more complex administrative requirements. SEP plans are beneficial as they are relatively straightforward to administer and are more affordable for smaller businesses.