The SEP contribution deduction limit for 2011 was less than 25% not to exceed $49,000 per year, and in 2012, it is less than 25% not to exceed $50,000.
If an employee earns say $230,000, they still have to adhere to the minimum of $49,000 or $50,000 rule.
If you apply the SEP for a regular calendar year, and not a fiscal year, you deduct for the year until it's end.
If you manage the SEP for a fiscal year, other than the calendar year, you deduct those contributions made for a year on the tax return for that year.
Employees distributions are based on the regular IRA rules.
An employer cannot block distributions or make a deal that blocks distributions for any period of time. You must begin to receive distributions by April 1 of the year following the calendar year when you reach 701/2.
The SAR SEP (not the same plan) had to have been set up before 1997 and included a salary reduction arrangement.