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<strong>Pioneer</strong> <strong>Investments</strong> <strong>Retirement</strong> <strong>Plans</strong><br />
SEP Step-By-Step<br />
It’s Easy to Open a <strong>Pioneer</strong> SEP-IRA Account<br />
1. Complete the <strong>Pioneer</strong> SEP Adoption Agreement in this booklet. (Keep the form for your records; you do not need to file it with the IRS.)<br />
2. Complete the <strong>Pioneer</strong> SEP-IRA Application.<br />
3. If you are transferring assets from an existing SEP-IRA to <strong>Pioneer</strong>, fill out the <strong>Pioneer</strong> Rollover/Transfer Form.<br />
<strong>Pioneer</strong> will arrange the transfer for you.<br />
4. Send the Application (and Rollover/Transfer Form, if applicable), along with your contribution check to:<br />
<strong>Pioneer</strong> Investment Management Shareholder Services, Inc. (PIMSS)<br />
P.O. Box 55014<br />
Boston, MA 02205-5014<br />
For overnight courier mail, please use the following address:<br />
<strong>Pioneer</strong> Investment Management Shareholder Services, Inc. (PIMSS)<br />
30 Dan Road<br />
Canton, MA 02021-2809<br />
<strong>Pioneer</strong> does not accept third party checks.<br />
If You Have Employees<br />
5. Provide all employees with the following:<br />
• Letter announcing your plan (see the Sample Announcement Letter).<br />
• Copy of Notice to Employees (exactly as shown in this booklet), which provides required IRS information.<br />
• Copy of the Adoption Agreement (completed and signed).<br />
• Copy of the <strong>Pioneer</strong> SEP Plan Document (also in this booklet).<br />
6. Give all eligible employees a participant kit containing a SEP-IRA Application (and a Rollover/Transfer Form for those transferring assets).<br />
Employees should complete and return these forms to you or the contact named in your announcement letter.<br />
7. Complete and send a <strong>Pioneer</strong> SEP-IRA Remittance Form with all contribution checks.<br />
PATRIOT Act Information<br />
Important Information About Opening a New Account<br />
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions<br />
to obtain, verify, and record information that identifies each person who opens an account.<br />
What this means for you: When you open an account, we will ask for your name, address, date of birth, and other information that will allow<br />
us to identify you. We may also ask to see your driver’s license or other identifying documents.<br />
Foreign Banks and Foreign Intermediaries will need to provide additional information to comply with Section 312 of the USA PATRIOT Act.<br />
Please talk to your investment professional or call <strong>Pioneer</strong> at 1-800-622-0176 if you have any questions about completing this application.<br />
For information about <strong>Pioneer</strong>’s privacy policy, see the Privacy of Customer Information brochure that accompanies each Fund’s prospectus.<br />
Check each Fund’s prospectus for information about the share classes available and which is suitable for your investment. This plan is intended<br />
for US citizens only.
<strong>Pioneer</strong> <strong>Investments</strong> <strong>Retirement</strong> <strong>Plans</strong><br />
This booklet contains:<br />
• Adoption Agreement<br />
• Plan Document<br />
• Sample Announcement Letter<br />
• Notice to Employees<br />
• Remittance Form<br />
• Contribution Worksheet
<strong>Pioneer</strong> <strong>Investments</strong> <strong>Retirement</strong> <strong>Plans</strong><br />
SEP Adoption Agreement<br />
A Simplified Employee Pension Plan<br />
1 ADOPTING THE PLAN<br />
The Employer named below hereby adopts a <strong>Pioneer</strong> Simplified Employee<br />
Pension Plan to provide, for the Participants therein, Individual <strong>Retirement</strong><br />
Account benefits in accordance with Section 408(k) of the Internal<br />
Revenue Code of 1986, as amended (the “Code”).<br />
2 THE EMPLOYER<br />
Business Name<br />
Business Address<br />
Fiscal Year for Federal Income Tax Purposes:<br />
Calendar Year; or<br />
Other Year beginning the_______ day of _________, each year.<br />
3 NAME OF PLAN<br />
The Simplified Employee Pension Plan shall be known as the :<br />
Business Name<br />
Simplified Employee Pension Plan (the “Plan”).<br />
4 ADOPTION AS AMENDMENT TO EXISTING PLAN<br />
If checked, the adoption of this Plan constitutes an amendment of the<br />
Employer’s existing Simplified Employee Pension Plan by deleting the<br />
provisions of the existing Plan and substituting this Plan in lieu thereof.<br />
5 EFFECTIVE DATE<br />
The effective date of the Plan or amendment shall be:<br />
The Effective Date shall be no later than the date the Plan or amendment is<br />
adopted by the Employer; provided, however, that if this Plan is adopted as a<br />
plan amendment (including amendments required to maintain plan qualification<br />
as a Simplified Employee Pension Plan under the Internal Revenue Code<br />
as amended by the Tax Reform Act of 1986, or other relevant legislation) plan<br />
provisions shall be effective retroactively to the extent necessary to maintain<br />
plan qualification under relevant legislation, regulations, revenue rulings and<br />
notices under the Code.<br />
6 ELIGIBILITY REQUIREMENTS<br />
An Employee is a Participant in the Plan if the Employee:<br />
(a) is at least __________ years old (must not exceed 21); and<br />
(b) has been an Employee of the Employer during __________<br />
(not to exceed three (3) of the immediately preceding<br />
five (5) Plan Years.<br />
Service with a Predecessor Employer:<br />
If checked, service with a predecessor employer shall be considered for purposes<br />
of determining eligibility under this Plan. Service with a predecessor<br />
employer shall be considered in any event if the predecessor employer also<br />
maintained this Plan and the Plan has been continued by the Employer. An<br />
employer shall be a “predecessor employer” for purposes of this section<br />
only if the Employer has succeeded to its assets and continues to conduct<br />
all or a substantial part of the business of such employer.<br />
Exclusion of Union Employees. There shall be excluded from the Plan<br />
all Employees who are members of a union with which the Employer<br />
has a collective bargaining agreement, directly or through an employer’s<br />
association, under the terms of which retirement benefits were the subject<br />
of good faith bargaining (unless such agreement provides that such<br />
Employees are to be included in the Plan).<br />
7 EMPLOYER CONTRIBUTIONS<br />
The Employer elects to make discretionary contributions for each Plan Year on<br />
behalf of each Participant allocated as follows:<br />
Nonintegrated Contribution Allocation Formula. Any Employer’s discretionary<br />
contribution shall be allocated to each Participant in an amount equal<br />
to a percentage of Compensation determined annually by the Employer.<br />
Integrated Contribution Formula. If checked, the Employer’s contribution<br />
shall be allocated to each Participant in accordance with the Integrated<br />
Contribution Allocation Formula in Section 1.3(a) of the Plan.<br />
8 TOP-HEAVY REQUIREMENTS<br />
If applicable, name below the plan other than this Plan in which the minimum<br />
top-heavy contribution will be made.<br />
9 SIGNATURES<br />
The Employer understands that:<br />
(i) The Adoption Agreement and related Simplified Employee Pension Plan are<br />
provided for consideration by counsel for employers wishing to establish<br />
the Plan under the Code;<br />
(ii) The Employer should consult the Employer’s own tax advisor concerning<br />
the completion of this Adoption Agreement and all tax and legal aspects<br />
of the Plan, the responsibility for which is assumed by the undersigned<br />
Employer;<br />
(iii) Contributions to this Plan are deductible by the Employer for the taxable<br />
year with or within which the Plan Year of the Plan ends; and<br />
(iv) Contributions made for a particular taxable year and contributed by the<br />
due date of the Employer’s income tax return, including extensions, are<br />
deemed made in that taxable year.<br />
Signed this ____________ day of _______________________, 20______<br />
Business Name<br />
By: X<br />
Authorized Signature<br />
<strong>Pioneer</strong> Investment Management USA Inc. will inform the Employer of any<br />
amendment to the Plan or the discontinuance or abandonment of the Plan.<br />
If you have questions about this Plan, please write or call <strong>Pioneer</strong> Investment<br />
Management USA Inc. at: 60 State Street, Boston, Massachusetts, 02109,<br />
(617) 742-7825.
SEP Plan Document<br />
A Simplified Employee Pension Plan<br />
ARTICLE I – Establishment of Simplified Employee<br />
Pension Plan<br />
1.1 The Employer named on the Adoption Agreement hereby adopts a <strong>Pioneer</strong><br />
Simplified Employee Pension Plan to provide, for the Participants therein,<br />
Individual <strong>Retirement</strong> Account benefits in accordance with Section 408(k)<br />
of the Internal Revenue Code of 1986, as amended (the “Code”).<br />
1.2 ELIGIBILITY REQUIREMENTS<br />
An Employee is a Participant in the Plan if the Employee satisfies the<br />
requirements in the Adoption Agreement.<br />
1.3 CONTRIBUTIONS AND ALLOCATION FORMULA<br />
For each Plan Year, the Employer will contribute to the SEP-IRA of each<br />
Participant an amount determined in accordance with the selections<br />
made in the Adoption Agreement. The Employer’s contributions for any Plan<br />
Year shall be payable no later than the time prescribed by law for filing<br />
the return (including extensions) for the taxable year with or within which<br />
the Plan Year ends. Contributions shall not discriminate in favor of Highly<br />
Compensated Employees.<br />
(a) Employer Contributions. The Employer elects to make discretionary<br />
contributions for each Plan Year on behalf of each Participant allocated<br />
in accordance with the following formulas as elected on the Adoption<br />
Agreement:<br />
Nonintegrated Contribution Allocation Formula. Any Employer’s discretionary<br />
contribution shall be allocated to each Participant in an amount<br />
equal to a percentage of his Compensation determined annually by the<br />
Employer.<br />
Integrated Contribution Allocation Formula. Any Employer’s discretionary<br />
contribution shall be allocated to each Participant in an amount equal to<br />
the sum of:<br />
(i) A percentage (the “Base Percentage”) of the Participant’s Compensation<br />
not in excess of the taxable wage base, and<br />
(ii) A percentage (the “Excess Percentage”) of the Participant’s Compensation<br />
in excess of the taxable wage base; provided however, that the Excess<br />
Percentage shall not exceed the Base Percentage by more than the lesser<br />
of the Base Percentage or the percentage equal to the portion (not less<br />
than 5.7 percent) of the OASDI tax rate under Code Section 3111(a)<br />
(in effect as of the beginning of the Plan Year) which is attributable to old<br />
age insurance.<br />
The taxable wage base is the maximum amount of earnings which may be<br />
considered wages for such year under Section 3121(a)(1) of the Code in<br />
effect as of the beginning of the Plan Year.<br />
(b) Limitation on Contributions. The Employer’s contribution on behalf of<br />
each Participant for any Plan Year determined under paragraph (a) above,<br />
when aggregated with contributions to all other SEPs and qualified plans<br />
of the Employer, shall not exceed the limitation in effect under Code<br />
Section 415(c)(1)(A).<br />
(c) The Employer shall not make a contribution for any Plan Year on behalf<br />
of any Employee whose Compensation (as defined in Code Section<br />
414(q)(7) was less than $300 (or such other amount as may be prescribed<br />
by the Secretary of the Treasury or his delegate) for such Year.<br />
(d) Top-Heavy Requirements. Unless another plan of the Employer is designated<br />
on the Adoption Agreement to satisfy the top-heavy requirements of<br />
Section 416 of the Code, each year this Plan is top-heavy (as defined in<br />
Section 2.10 below) the Employer will make a minimum contribution to the<br />
SEP-IRA of each non-Key Employee eligible to participate, which, in combination<br />
with other nonelective contributions, if any, is equal to the lesser of<br />
three percent of such Employee’s Compensation or a percentage at which<br />
elective and nonelective contributions are made under the Plan for the<br />
Plan Year for the Key Employee for whom such percentage is the largest.<br />
For purposes of satisfying the minimum contribution requirement under Section<br />
416 of the Code, all nonelective contributions under the Plan shall be taken<br />
into account.<br />
ARTICLE II – Definitions<br />
As used in the Plan, the following terms shall have the meaning hereinafter set<br />
forth, unless a different meaning is plainly required by the context.<br />
2.1 “Code” shall mean the Internal Revenue Code of 1986, as amended from<br />
time to time.<br />
2.2 “Compensation” shall mean:<br />
(a) Compensation is defined as wages as defined in Section 3401(a) and<br />
all other payments of compensation to an Employee by the Employer<br />
(in the course of the Employer’s trade or business) for which the Employer<br />
is required to furnish the Employee a written statement under Sections<br />
6041(d) and 6051(a)(3) of the Code. Compensation must be determined<br />
without regard to any rules under Section 3401(a) that limit the<br />
remuneration included in wages based on the nature or location of<br />
the employment or the services performed (such as the exception for<br />
agricultural labor in Section 3401(a)(2)) and<br />
(b) earned income within the meaning of Section 401(c)(2) of the Code,<br />
including net earnings from self-employment to the extent such net<br />
earnings constitute compensation for personal services actually<br />
rendered in the business covered by this Plan.<br />
In addition to other applicable limitations set forth in the Plan, and notwithstanding<br />
any other provision of the Plan to the contrary, the annual Compensation<br />
of each Employee taken into account under the Plan shall not exceed<br />
$150,000 as adjusted by the Commissioner for increases in the cost of living<br />
n accordance with Section 401(a)(17)(B) of the Code. The cost-of-living<br />
adjustment in effect for a calendar year applies to any period, not exceeding<br />
12 months, over which Compensation is determined (determination period)<br />
beginning in such calendar year. If a determination period consists of fewer<br />
than 12 months, annual Compensation limit will be multiplied by a fraction,<br />
the numerator of which is the number of months in the determination period,<br />
and the denominator of which is 12.<br />
Any reference in the Plan to the limitation under Section 401(a)(17) of the<br />
Code shall mean the annual Compensation limit set forth in this provision.<br />
Compensation shall not include any contribution to this Plan and any amount<br />
received as a pension or annuity or as deferred compensation and compensation<br />
shall include only that compensation which is actually paid to the<br />
Participant during the year; provided, however, that for Plan Years commencing<br />
after December 31, 1997, compensation shall include any elective deferrals<br />
(as defined in Section 402(g)(3)) and any amount that is contributed or<br />
deferred by the Employer at the election of the Employee and which is not<br />
includible in gross income by reason of Section 125 or Section 457 of the<br />
Code. Notwithstanding any provisions of this Plan to the contrary, Compensation<br />
shall be defined as may be required by Sections 408 and 414(s) of the Code<br />
or other applicable provisions in order to preserve the qualification of this<br />
Plan as a Simplified Employee Pension Plan and to assure the deductibility of<br />
contributions to the Plan.<br />
2.3 “Employee”:<br />
(a) “Employee” shall mean an individual who is employed by the Employer,<br />
including an employee within the meaning of Section 401(c)(1) of the<br />
Code. The term “Employee” shall include a leased Employee who is<br />
required to be treated as an Employee of the Employer under Section<br />
414(n) of the Code but shall not include an independent contractor.<br />
(b) “Key Employee” shall mean any Employee or former Employee (and the<br />
beneficiaries of these employees) who, at any time during the Plan Year<br />
or any of the four preceding Plan Years, is one of the following: (i) an<br />
officer of the Employer whose annual Compensation is greater than 50<br />
percent of the dollar limitation in effect under Section 415(b)(1)(A) of<br />
the Code; (ii) an owner of one of the ten largest interests in the Employer<br />
(if the Employee’s Compensation exceeds 100% of the limit under Section
415(c)(1)(A)); (iii) a 5% owner of the Employer as defined in Section<br />
416(i)(1)(B)(i) of the Code; or (iv) a 1% owner of the Employer having an<br />
annual Compensation from the Employer of more than $150,000.<br />
(c) “Highly Compensated Employee” shall mean an individual described in<br />
Section 414(q) of the Code who:<br />
(i) During the current or preceding year was a 5% owner as defined in Section<br />
416(i)(1)(B)(i) of the Code; or<br />
(ii) For the preceding year, received Compensation in excess of $80,000,<br />
as adjusted pursuant to Section 414(g) and 415(d) of the Code, and,<br />
if the Employer elects, was in the top-paid group of Employees for such<br />
preceding year (the top 20% of Employees, by Compensation).<br />
2.4 “Employer” shall mean the Employer named in the Adoption Agreement.<br />
The term shall also include any corporation which together with the<br />
Employer forms a controlled group of corporations within the meaning<br />
of Code Section 414(b) or any other trade or business which is under<br />
common control with the Employer within the meaning of Code Section<br />
414(c) or any other employer required to be aggregated under Code<br />
Section 414(o). All members of an “affiliated service group” as defined<br />
in Section 414(m) of the Code will be considered a single employer for<br />
purposes of determining eligibility to participate in the Plan and any<br />
contribution under the Plan will be based upon all the Compensation<br />
(to the extent permitted by law and the Plan) received from all members of<br />
the affiliated service group during the Plan Year for which the contribution<br />
is made.<br />
2.5 “Family member” shall mean an individual who is related to a Highly<br />
Compensated Employee as a spouse, or as a lineal ascendant (such as<br />
a parent or grandparent) or descendant (such as a child or grandchild) or<br />
spouse of either of those, in accordance with Section 414(q) of the Code<br />
and the regulations thereunder.<br />
2.6 “Plan” shall mean this Simplified Employee Pension Plan (including the<br />
Adoption Agreement) together with any and all amendments.<br />
2.7 “Plan Year” shall mean the fiscal year of the Employer as specified in the<br />
Adoption Agreement. The first Plan Year shall be the Employer’s fiscal year<br />
which includes the effective date of the Plan. In the event there is a short<br />
Plan Year because of the conversion of the Plan Year from a calendar year<br />
to a fiscal year or otherwise, such short year shall be treated as a separate<br />
Plan Year for eligibility purposes and if the Plan is integrated, the Taxable<br />
Wage Base shall be reduced to equal that amount which bears the same<br />
ratio to the Taxable Wage Base as the number of days in the short year<br />
bears to 365.<br />
2.8 “Simplified Employee Pension Plan” or “SEP” shall mean a Simplified<br />
Employee Pension Plan as defined in Section 408(k) of the Code.<br />
2.9 “SEP-IRA” or “IRA” shall mean the <strong>Pioneer</strong> Individual <strong>Retirement</strong> Account<br />
established by a Participant or if contributions thereto are not equal to or<br />
greater then the minimum amounts required for such accounts, another<br />
Individual <strong>Retirement</strong> Account selected and established by the Participant,<br />
or as provided under Section 3.2 of Article III, by the Employer. In any<br />
case, such Individual <strong>Retirement</strong> Account shall meet the requirements of<br />
Subsections 408(a), 408(j) and 408(k) of the Code.<br />
2.10 This Plan is “top-heavy” for a Plan Year if, as of the last day of the previous<br />
Plan Year (or current Plan Year if this is the first year of the Plan) the total<br />
of elective and nonelective contributions made on behalf of Key Employees<br />
for all the years this Plan has been in existence exceeds 60% of such<br />
contributions for all Employees. If the Employer maintains (or maintained<br />
within the prior five years) any other SEP or defined contribution plan in<br />
which a Key Employee participates (or participated), the contributions or<br />
account balances, whichever is applicable, must be aggregated with the<br />
contributions made to this Plan. The contributions (and account balances,<br />
if applicable) of an Employee who ceases to be a Key Employee or of an<br />
individual who has not been in the employ of the Employer for the previous<br />
five years shall be disregarded. The identification of Key Employees and<br />
the top-heavy calculation shall be determined in accordance with Section<br />
416 of the Code and the regulations thereunder.<br />
ARTICLE III – Eligibility and Participation<br />
3.1 An Employee who has satisfied the eligibility requirements specified in<br />
the Adoption Agreement as of the effective date of the Plan shall be a<br />
Participant as of such date. An Employee who thereafter satisfies the<br />
eligibility requirements specified in the Adoption Agreement shall become<br />
a Participant as of the first day of the calendar month in which such<br />
eligibility requirements are met.<br />
3.2 When an Employee becomes a Participant, the Employer shall arrange for<br />
him to apply for a SEP-IRA. Such application shall be made no later than<br />
the time at which the Employer makes its first contribution on behalf of the<br />
Participant. A SEP-IRA will be established by the Employer on behalf of an<br />
Employee who fails to do so.<br />
ARTICLE IV – Excess SEP Contributions<br />
4.1 The Employer shall notify each affected Highly Compensated Employee,<br />
within 2-1/2 months following the end of the Plan Year to which the<br />
excess SEP contributions relate, of any excess SEP contributions to the<br />
Highly Compensated Employee’s Account for the applicable year. Such<br />
notification shall specify the amount of the excess SEP contributions and<br />
the calendar year in which the contributions are includible in income and<br />
must provide an explanation of applicable penalties if the excess<br />
contributions are not withdrawn in a timely fashion.<br />
4.2 Income allocable to the excess SEP contributions is includible in the year<br />
of withdrawal from the SEP-IRA.<br />
4.3 If the Employer fails to notify any of the affected Employees within 2-1/2<br />
months following the end of the Plan Year of an excess SEP contribution,<br />
the employer must pay a tax equal to 10% of the excess SEP contribution.<br />
If the Employer fails to notify Employees by the end of the Plan Year following<br />
the Plan Year in which the excess SEP contributions arose, the SEP no<br />
longer will be considered to meet the requirements of Section 408(k)(6)<br />
of the Code. If the SEP no longer meets the requirements of Section<br />
408(k)(6), then any contribution to an Employee’s IRA will be subject to<br />
the IRA contribution limitations of Sections 219 and 408 and thus may be<br />
considered an excess contribution to the Employee’s IRA.<br />
4.4 The notification to each affected Employee of the excess SEP contributions<br />
must specifically state in a manner calculated to be understood by the<br />
average Employee:<br />
(a) The calendar year in which the excess SEP contributions are includible in<br />
gross income; and<br />
(b) That the Employee must withdraw the excess SEP contributions<br />
(and allocable income) from the SEP-IRA by April 15 following the year<br />
of notification by the Employer. Those excess contributions not withdrawn<br />
by April 15 following the year of notification will be subject to the IRA<br />
contribution limitations of Sections 219 and 408 of the Code for the<br />
preceding calendar year and thus may be considered an excess contribution<br />
to the Employee’s SEP-IRA. Such excess contributions may be subject<br />
to the six percent tax on excess contributions under Code Section 4973.<br />
If income allocable to an excess SEP contribution is not withdrawn by April<br />
15 following the year of notification by the Employer, the income may be<br />
subject to the ten percent tax on early distributions under Code Section<br />
72(t) when withdrawn.<br />
ARTICLE V – Administration<br />
5.1 The Named Fiduciary (as that term is defined under the Employee <strong>Retirement</strong><br />
Income Security Act of 1974, as amended from time to time) shall<br />
be the Plan Administrator.<br />
5.2 The Employer, or one or more persons appointed by the Employer, shall be<br />
the Plan Administrator. The Plan Administrator shall be responsible for the<br />
operation of the Plan in accordance with its terms. The Plan Administrator<br />
shall determine all questions arising out of the administration, interpretation<br />
and application of the Plan, which determinations shall be conclusive<br />
and binding on all persons.<br />
The Plan Administrator shall be responsible for providing such returns,<br />
reports, descriptions and statements as are required of the Employer<br />
by law, within the time prescribed by law and making them available for<br />
examination by Participants and their beneficiaries when required by law.
5.3 All administrative expenses shall be paid by the Employer; provided,<br />
however, that the Employer shall not be responsible for any custodian fees<br />
assessed in connection with any SEP-IRA.<br />
ARTICLE VI – Amendment and Termination<br />
6.1 The Plan may at any time and from time to time be modified, amended<br />
or terminated (including retroactive amendments) by the Employer,<br />
or, as long as the Plan continues to include <strong>Pioneer</strong> Individual <strong>Retirement</strong><br />
Accounts, by <strong>Pioneer</strong> Investment Management USA Inc. Any such<br />
modification, amendment or termination shall be in writing signed by<br />
the Employer or <strong>Pioneer</strong> Investment Management USA Inc. and communicated<br />
to all appropriate parties as required by law. The Employer shall<br />
be deemed to have consented to any such amendment by The <strong>Pioneer</strong><br />
Group, Inc.<br />
6.2 Except to the extent required under Section 1.3(d) of Article I, the Employer<br />
is not and shall not be under any obligation or liability whatsoever to<br />
make contributions to, or to maintain, the Plan for any given length of time<br />
and may in its sole and absolute discretion discontinue such contributions<br />
or terminate the Plan without any liability whatsoever for such discontinuance<br />
or termination.<br />
6.3 An Employer who has ever maintained a defined benefit plan which is<br />
now terminated may not participate in this <strong>Pioneer</strong> Simplified Employee<br />
Pension Plan as a prototype plan and this Plan will be considered to be<br />
an individually designed plan. If, subsequent to adopting this plan, any<br />
defined benefit plan of the Employer terminates, the Employer will no<br />
longer participate in this prototype plan and will be considered to have an<br />
individually designed plan.<br />
IRS Opinion Letter<br />
ARTICLE VII – Miscellaneous<br />
Below is the Internal Revenue Service opinion letter approving the form of the <strong>Pioneer</strong> Simplified Employee Pension Plan.<br />
7.1 Neither the establishment of the Plan nor any modification thereof, nor<br />
the creation of any account, nor the payment of any contributions shall<br />
be construed as giving to any Participant or any other person any legal<br />
or equitable right against the Employer, except as specifically provided<br />
herein; and in no event shall the terms of employment of any Employee<br />
or Participant be modified or in any way affected hereby.<br />
7.2 The masculine pronoun, whenever used herein, shall include the feminine<br />
pronoun, and the singular shall include the plural.<br />
7.3 This Plan must be used in conjunction with an Individual <strong>Retirement</strong><br />
Account (as defined in Section 408 of the Code) for which the Internal<br />
Revenue Service has issued a favorable opinion letter.
<strong>Pioneer</strong> <strong>Investments</strong> <strong>Retirement</strong> <strong>Plans</strong><br />
<strong>Pioneer</strong> <strong>Investments</strong> <strong>Retirement</strong> <strong>Plans</strong><br />
Sample Announcement Letter<br />
Dear Employee:<br />
We are pleased to announce that beginning _______________________, our company will offer a new retirement<br />
plan, called a Simplified Employee Pension Plan, or SEP. As an eligible employee, you are entitled to any contributions<br />
that the company makes to the plan. All contributions made on your behalf will be invested directly into an IRA-type<br />
account, called a SEP-IRA. Here are some of the benefits this plan offers:<br />
• You can choose among a variety of professionally managed investment options.<br />
• Earnings on your contributions grow tax-deferred.<br />
• There are no vesting schedules, so you immediately own 100% of all money in your account.<br />
[select one of the paragraphs below, based on how you plan to handle enrollment]<br />
To introduce the SEP plan, we’ve scheduled an enrollment meeting to take place on _________________________.<br />
You’ll hear all about the plan’s features and investment choices, and will be able to ask any questions you might have.<br />
[or]<br />
To sign up for the SEP plan, simply fill out the SEP-IRA Application (and Rollover/ Transfer Form if transferring assets<br />
from another retirement plan) and return them to _____________________.<br />
If you have any questions about the plan, please contact ______________________.
<strong>Pioneer</strong> <strong>Investments</strong> <strong>Retirement</strong> <strong>Plans</strong><br />
Notice to Employees for 2007<br />
The information below explains what a SEP is, how contributions are<br />
made and how to treat your employer’s contributions for tax purposes.<br />
For more information, see IRS Publication 590.<br />
Questions and Answers<br />
1. What is a simplified employee pension, or SEP?<br />
A SEP is a written arrangement (a plan) that allows an employer to<br />
make contributions toward your retirement. Contributions are made<br />
to an individual retirement account (IRA).<br />
Your employer will provide you with a copy of the agreement (including<br />
the adoption agreement) containing participation rules and a description<br />
of how employer contributions may be made to your IRA.<br />
All amounts contributed to your IRA by your employer belong to you even<br />
after you stop working for that employer.<br />
2. Must my employer contribute to my IRA under the SEP?<br />
No. An employer is not required to make SEP contributions. If a contribution<br />
is made, it must be allocated to all the eligible employees according<br />
to the SEP agreement. <strong>Pioneer</strong> Prototype SEP specifies that the contribution<br />
for each eligible employee will be the same percentage of compensation<br />
(excluding compensation higher than $225,000) for all employees.<br />
However, if the plan is integrated with Social Security, the employer<br />
uses a contribution formula that applies one percentage to earnings<br />
below the Social Security taxable wage base and a higher percentage to<br />
earnings above that level.<br />
3. How much may my employer contribute to my SEP-IRA in any year?<br />
Your employer will determine the amount to be contributed to your IRA<br />
each year. However, the amount for 2007 is limited to the smaller of<br />
$45,000 or 25% of your compensation for that year. Compensation does<br />
not include any amount that is contributed by your employer to your IRA<br />
under the SEP. Your employer is not required to make contributions every<br />
year or to maintain a particular level of contributions.<br />
4. How do I treat employer SEP contributions for my taxes?<br />
Employer contributions to your SEP-IRA are excluded from your income<br />
unless there are contributions in excess of the applicable limit.<br />
See Question 3. Employer contributions within these limits will not be<br />
included on your Form W-2.<br />
5. May I contribute to a regular IRA if I am a participant in a SEP?<br />
Yes. You may contribute the lesser of $4,000 ($5,000 if age 50 or older)<br />
or 100% of your compensation to an IRA. However, the amount you can<br />
deduct may be reduced or eliminated because, as a participant in a SEP,<br />
you are covered by an employer retirement plan.<br />
6. Are there any restrictions on the IRA I select to have my SEP contributions<br />
deposited in?<br />
Contributions must be made to a master or prototype IRA for which the<br />
IRS has issued a favorable opinion letter. The prototype <strong>Pioneer</strong> IRA is<br />
such an approved prototype.<br />
7. What if I do not want to participate in a SEP?<br />
If your employer does not require you to participate in a SEP as a condition<br />
of employment, and you elect not to participate, all other employees<br />
of your employer may be prohibited from participating. If one or more<br />
eligible employees do not participate and the employer tries to establish<br />
a SEP for the remaining employees, it could cause adverse tax consequences<br />
for the participating employees.<br />
8. Can I move funds from my SEP-IRA to another tax-sheltered IRA?<br />
Yes. You can withdraw or receive funds from your SEP-IRA if, within<br />
60 days of receipt, you place those funds in another IRA or SEP-IRA.<br />
This is called a “rollover” and can be done without penalty only once<br />
in any one-year period. However, there are no restrictions on the number<br />
of times you may make “transfers,” if you arrange to have these funds<br />
transferred between the trustees or the custodians so that you never<br />
have possession of the funds.<br />
9. What happens if I withdraw my employer’s contribution from my IRA?<br />
You may withdraw your employer’s contribution at any time, but any<br />
amount withdrawn is includible in your income unless rolled over. Also,<br />
if withdrawals occur before you reach age 59 1⁄ 2, you may be subject to<br />
a tax on early withdrawal.<br />
10. May I participate in a SEP even though I am covered by another plan?<br />
Yes. You may participate in a SEP even though you participate in another<br />
qualified retirement plan of the same employer. If you work for several<br />
employers, you may be covered by a SEP of one employer and a different<br />
SEP, pension or profit-sharing plan of another employer.<br />
11. What happens if too much is contributed to my SEP-IRA in one year?<br />
Contributions exceeding the yearly limitations may be withdrawn<br />
without penalty by the due date (plus extensions) for filing your tax<br />
return (normally April 15), but are includible in your gross income.<br />
Excess contributions left in your SEP-IRA account after that time may<br />
have adverse tax consequences. Withdrawals of those contributions<br />
may be taxed as premature withdrawals. See Question 9.<br />
12. Is my employer required to provide me with information about SEP-IRAs and<br />
the SEP agreement?<br />
Yes. Your employer must provide you with a copy of the completed SEP<br />
Agreement and a yearly statement showing any contributions to your IRA.<br />
13. Is the financial institution where my IRA is established required to provide<br />
me with information?<br />
Yes. It must provide you with a disclosure statement that contains the<br />
following information in plain, nontechnical language.<br />
1. The law that relates to your IRA.<br />
2. The tax consequences of various options concerning your IRA.<br />
3. Participation eligibility rules, and rules on the deductibility of<br />
retirement savings.<br />
4. Situations and procedures for revoking your IRA, including the name,<br />
address, and telephone number of the person designated to receive<br />
notice of revocation. (This information must be clearly displayed at the<br />
beginning of the disclosure statement.)<br />
5. A discussion of the penalties that may be assessed because of<br />
prohibited activities concerning your IRA.<br />
6. Financial disclosure that provides the following information:<br />
a. Projects value growth rates of your IRA under various contribution<br />
and retirement schedules, or describes the method of determining<br />
annual earnings and charges that may be assessed.<br />
b. Describes whether, and for when, the growth projections are<br />
guaranteed, or a statement of the earnings rate and the terms<br />
on which the projections are based.<br />
c. States the sales commission for each year expressed as a<br />
percentage of $1,000.<br />
In addition, the financial institution must provide you with a financial<br />
statement each year. You may want to keep these statements to evaluate<br />
your IRA’s investment performance.
<strong>Pioneer</strong> <strong>Investments</strong> <strong>Retirement</strong> <strong>Plans</strong><br />
SEP-IRA Contribution Remittance Form<br />
Please enclose this form with your check made payable to <strong>Pioneer</strong> Investment Management Shareholder Services, Inc. (PIMSS).<br />
To: <strong>Pioneer</strong> Investment Management Shareholder Services, Inc. (PIMSS), P.O. Box 55014, Boston, MA 02205-5014<br />
From:<br />
Employer Name<br />
Street Address City State Zip Code<br />
Contact Name<br />
Participant Name* Social Security Number Contribution Amount<br />
*If adding a new participant, please enclose a <strong>Pioneer</strong> SEP-IRA Application.<br />
Total Contribution Amount $________________________________________<br />
(If total does not match amount shown on check, please attach explanation.)
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<strong>Pioneer</strong> <strong>Investments</strong> <strong>Retirement</strong> <strong>Plans</strong><br />
Integrated Contribution Formula Worksheet<br />
The purpose of an integrated plan is to favor your higher-paid employees, including yourself. You can choose to integrate by checking the appropriate<br />
box in Section 7 of the <strong>Pioneer</strong> SEP Adoption Agreement. (Note: If you have more than one plan, only one can be integrated with Social Security.)<br />
When you’re ready to allocate the plan contribution, use this worksheet to determine how much each employee will receive.<br />
Example of integrated formula using the following assumptions:<br />
• Social Security Taxable Wage Base of $97,500 for 2007 1<br />
• Employer contribution of $25,000 to be allocated between participants “X” and “Y”<br />
For each participant calculate:<br />
(a) Total compensation (do not include amounts over $225,000 2 )<br />
(b) Excess compensation (amounts above the taxable wage base)<br />
(c) Total and excess compensation combined (“a” plus “b”)<br />
(d) Compensation ratio (“a” divided by the sum of all participants’ compensation)<br />
(a)<br />
Total<br />
Compensation<br />
(b)<br />
Excess Compensation<br />
(over $97,500 1 )<br />
(c)<br />
Total+Excess Compensation<br />
(a + b)<br />
(d)<br />
Compensation Ratio<br />
(a/sum of a)<br />
X $200,000 $102,500 $302,500 80%<br />
Y $50,000 0 50,000 20%<br />
Total $250,000<br />
Allocation to X Allocation to Y Employer contributions remaining<br />
Steps:<br />
after each step<br />
1. Calculate 3% of total compensation (a) $6,000 $1,500 $25,000 - 7,500 = $17,500<br />
2. Calculate 3% of excess compensation (b) 3,075 0 $17,500 - 3,075 = $14,425<br />
3. Calculate 2.7% of total plus excess compensation (c) 8,168 1,350 $14,425 - 9,518 = $ 4,907<br />
4. Allocate remaining contribution using compensation ratio (d) 3,926 981 $ 4,907 - 4,907 = $ 0<br />
Total Contribution $21,169 $3,831<br />
Use the spreadsheet below to calculate the contribution allocation for your company. Or, if you have more than one participating employee, set up<br />
your own spreadsheet using this as a template.<br />
Note: If the employer’s contribution is not sufficient to perform all steps, complete each step to the extent possible until the total contribution is<br />
exhausted. Do not allocate more than 25% of compensation or $45,000 to any participant.<br />
Name<br />
(a)<br />
Total<br />
Compensation<br />
(b)<br />
Excess Compensation<br />
(over $97,500 1 )<br />
(c)<br />
Total+Excess<br />
Compensation (a + b)<br />
(d)<br />
Compensation Ratio<br />
(a/sum of a)<br />
Total<br />
___________<br />
Steps: Participant #1 Participant #2<br />
1. Calculate 3% of total compensation (a)<br />
2. Calculate 3% of excess compensation (b)<br />
3. Calculate 2.7% of total plus excess compensation (c)<br />
4. Allocate remaining contribution using compensation ratio (d)<br />
Total Contribution ___________ ___________<br />
1<br />
$94,200 for 2006.<br />
2<br />
This amount reflects the cost-of-living in effect on January 1, 2007. The amount is adjusted periodically and is announced in the Internal Revenue Bulletin.<br />
Employer contributions<br />
remaining after each step
Securities offered through <strong>Pioneer</strong> Funds Distributor, Inc., 60 State Street, Boston, MA 02109.<br />
Underwriter of <strong>Pioneer</strong> mutual funds, Member SIPC ©2007 <strong>Pioneer</strong> <strong>Investments</strong> • pioneerinvestments.com 17433-01-0607