The Savings Incentive Match Plan for Employees (SIMPLE) IRA is a tax-qualified retirement plan for businesses (C Corps, S Corps, Partnerships, and Sole Proprietorships) with fewer than 100 employees. It enables eligible firms to offer 401k-type benefits without complicated rules or high administrative expenses. It enables eligible employees to make tax-deductible contributions beyond what a traditional IRA allows.
For
businesses, SIMPLE means:
|
Required
employer contributions can be made on either a 3
percent “elective” basis or a 2 percent
“non-elective” basis.
Under the elective method, the employer is required to contribute only if an employee “elects” to contribute. Under the non-elective method, the employer contributes a flat percentage of compensation (2 percent minimum) for everyone regardless of any personal participation. |