Participants can also have an IRA account, if income is below certain limits. Employees can withdraw the funds as fast as they are put into the account. Employees usually control investments. Employer may not adopt a SEP if it ever had installed a defined benefit plan. There are no guarantees as to future benefits.
Investment risk rests on the participant.
There is no assurance as to the frequency and amount of employer contributions. Lump-sum treatment of distributions is not available. No tax-free disability payout is available. There are no forfeitures to be reallocated. Just as with an IRA, all SEP contributions are immediately and fully vested.