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The term "SEP" stands for Simplified Employee Pension.

Under a SEP, an IRA is set up by or for an employee to accept the employer’s contributions.
The SEP IRA is a retirement plan whereby an employer makes contributions on behalf of their employees. SEP IRA are ideal for self-employed people and small business owners.
As the employer’s profit fluctuates from year to year, so can the employer’s contributions to the plan.

The SEP is intended to be an attractive alternative to tax qualified retirement plans which are subject to ERISA because a SEP plan is relatively easy and inexpensive to establish and administer.

Also See:
Individual Retirement Account

SEP IRA - definition

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