408(k) plan

Business, Legal & Accounting Glossary

Definition: 408(k) plan


408(k) plan

Quick Summary of 408(k) plan


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.




Examples of 408(k) plan in a sentence


You may want to try and get a 408 plan so that you know you will be covered in the future.

The 408 plan was a lot better than the 401 k plan because I understood it better and I thought it was a better decision.

Since Joe’s company only had 20 employees, he decided to use a 408 plan instead of a 401(k) as it was both simpler and allowed him to save more money while still providing his employees with benefits.


Related Phrases


Salary Reduction Simplified Employee Pension Plan


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Definition Sources


Definitions for 408(k) plan are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 29th October, 2021 | 2 Views.