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 ?
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.
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.
The Savings Incentive Match Plan for Employees (SIMPLE) IRA may be a good choice as a first retirement savings plan for small businesses that want to offer employee salary deferral contributions and who have 100 or fewer employees.
Plan Type 2 of 3: Savings Incentive Match Plan for Employees (SIMPLE IRA)
Retirement plan "Check-Ups" are compliance checklists for savings incentive match plan for employees (SIMPLE) IRAs, simplified employee pensions (SEPs) or salary reduction simplified employee pensions (SARSEPs) and found on the "Retirement Plans" page of the IRS website.
Nonsponsors are unfamiliar with different retirement plan options available to them as small businesses: Many report that they have "never heard" of the following plan types: simplified employee pensions (SEPs) (51 percent); traditional pension or defined benefit plans (36 percent); savings incentive match plan for employees (SIMPLE) plans, which were created by Congress specifically for small employers (31 percent); deferred profit-sharing plans (23 percent); and 401(k) plans (3 percent).
The 2001 maximum for a savings incentive match plan for employees (SIMPLE) (section 408(p)) is $6,500 (indexed annually for inflation).
A new savings incentive match plan for employees, known as "SIMPLE," can be adopted as part of a 401(k) plan or as an IRA.
If you always wanted to offer a pension plan to your employees but felt your company couldn't afford the administrative expense, the new Savings Incentive Match Plan for Employees (SIMPLE) may be the answer.
It establishes a new Savings Incentive Match Plan for Employees (SIMPLE) of small businesses (those companies employing 100 or fewer workers).
Effective for plan years beginning in 1997, the Act creates a new simplified retirement plan called the Savings Incentive Match Plan for Employees (SIMPLE Plan).
Discuss your options with a financial planner or an accountant who can steer you toward the right option, be it a traditional 401(k) plan, a savings incentive match plan for employees (SIMPLE-IRA), or a simplified employee pension (SEP-IRA).