Savings Incentive Match Plan for Employees

Savings Incentive Match Plan for Employees (SIMPLE) 401(k) plan

A tax-deferred retirement savings plan similar to a conventional 401(k) plan, redesigned with specific rules to meet the needs of small employers. The Small Business Job Protection Act of 1996 created these plans for companies with fewer than 100 employees. An employee's contributions are indexed for inflation, and employers must make annual annual matching contributions.

Savings Incentive Match Plan for Employees of Small Employers

An IRA or 401(k) plan for employees of small businesses, usually with fewer than 100 employees. The employee may make tax deductible contributions, and the employer may contribute in one of two ways. The employer may either match employee contributions up to 3% of the employee's annual salary, or provide a contribution of 2% of the salary regardless of how much the employee contributes. The employee controls the investment of the contributions.
References in periodicals archive ?
SIMPLE is an acronym for savings incentive match plan for employees.
* A QCD is generally a nontaxable distribution made directly by the trustee of an IRA (other than a simplified employee pension [SEP] plan or savings incentive match plan for employees [SIMPLE] IRA) to an eligible charity.
While it is true that Simplified Employee Pension (SEP) plans and Savings Incentive Match Plan for Employees (SIMPLE) have a low cost due to assets held direct to fund or managed by an investment adviser, each of these plans comes with a lack of flexibility, no loan capabilities or the ability to save to a Roth tax-free.
To implement this plan the employer can use Form 5304-SIMPLE, Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)--Not for Use With a Designated Financial Institution, or Form 5305-SIMPLE, Savings Incentive Match Plan for Employees of Small Employers (SIMPLE)--for Use With a Designated Financial Institution.
have teamed up to offer a SIMPLE IRA (or a Savings Incentive Match Plan for Employees Individual Retirement Account) to employers with 100 or fewer employees.
Small employers who have concerns about the cost and complexity of administering a retirement plan may want to establish a Savings Incentive Match Plan for Employees (SIMPLE) IRA.
Depending on its legal structure, the company could opt to fund an SEP (Simplified Employee Pension) IRA, SIMPLE (Savings Incentive Match Plan for Employees) IRA, or Keogh Retirement account.
A Savings Incentive Match Plan for Employees IRA is a tax-favored retirement plan that self-employed individuals set up for themselves, or that small employers set up for themselves and their employees.
* SIMPLE (Savings Incentive Match Plan for Employees of small employers) IRA is similar to a 401(k) in that employees can contribute.
EXHIBIT A Comparison of the Simplified Employee Pension (SEP) Plan and the Savings Incentive Match Plan for Employees (Simple) SEP Simple Design Individual IRA established for each retirement account participant (IRA) established for each participant Employer Yes-limited to 25% Yes-required matching Contributions of covered contributions; 3% employees payroll; dollar-for-dollar on contributions are employee elective not mandatory.
A SIMPLE (or savings incentive match plan for employees) IRA, allows each employee to contribute $11,500, plus between 2% and 3% of your self-employment income.
The SIMPLE Cafeteria Plan Act of 2009 would create a Simple Cafeteria Plan for small businesses that would be modeled after the Savings Incentive Match Plan for Employees (SIMPLE) pension plan enacted in 1996.