• A 408(k) is an employer-sponsored pension plan similar to a 401(k).

  • The plan is also called a simplified employee pension, which is a type of individual retirement account.
  • The 408(k) plan is available to companies with 25 or fewer employees and self-employed individuals who are subject to the same contribution limits as employers.
  • Only employer contributions are allowed in the 408(k) plan.
  • The IRS limits employers’ contributions to 408(k) plans for their employees.