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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


A savings incentive match plan for employees that is similar to but more flexible than an IRA for businesses with 100 or fewer employees. Employees enter into a qualified salary reduction agreement to contribute a percentage of their annual compensation to a tax-deferred retirement account.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


A SIMPLE, also known as a SIMPLE IRA, is short for Savings Incentive Match Plans for Employees, an employer sponsored retirement savings plan that may be offered by companies with fewer than 100 employees.

Employers must contribute to eligible employees' accounts each year in one of two ways. They can make a contribution equal to 2% of salary for every employee, or match dollar-for-dollar each employee's contribution to the plan, up to 3% of that employee's annual salary.

A SIMPLE may be set up by establishing an IRA in each employee's name or as a 401(k). Congress sets an annual dollar limit on the tax-deferred amount an employee may contribute, based on the type of SIMPLE it is. Contribution ceilings for SIMPLE-IRAs are lower than for other employer sponsored plans.

You may withdraw assets from a SIMPLE without penalty if you are 59 1/2 or older and retired. And you must begin taking minimum required distributions by April 1 of the year following the year you turn 70 1/2 unless you're still working. Taxes are due on distributions at your regular tax rate.

You may roll your assets over into another employer plan or an IRA if you leave your job for any reason or retire.

Two key differences between SIMPLEs and other employer plans are that your account must be open at least two years before you can withdraw or move the money, and the federal tax penalty for early withdrawal is 25% of the amount you take, rather than 10%.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
The author argues that statements ostensibly about composite material objects cannot be paraphrased in terms of plural reference and quantification over simples alone.
To avoid these problems, the author proposes a third view, that physically simple things occupy a finite volume without themselves having parts.
* For plans other than SIMPLE plans under sections 401(k)(11) or 408(p), the applicable dollar amount is $1,000 for 2002, $2,000 for 2003, $3,000 for 2004, $4,000 for 2005 and $5,000 for 2006 and thereafter.
As with the main Wikipedia, the Simple English Wikipedia ( is a general, user-created encyclopedia; however, it uses simpler vocabulary and writing.
John Paterson, CEO of Really Simple Systems, adds, "By integrating web-based applications with Really Simple Systems web-based CRM system, businesses can offer customers a closely coupled CRM functionality and get exposure to Really Simple Systems' customer base."
SIMPLE IRAs are easy to adopt and to administer while providing employees with tax-deferred retirement savings benefits much like those of a qualified plan.
This expansion is the direct result of fine fact that Simple Simon's Pies continue to win permanent contracts, combined with ever-increasing internet sales.
Harried decision makers throughout the animal kingdom lack the mental tools to zip through intricate probability calculations but boast enough brain power to discover and exploit simple guides.
Although simple textual versions have been available for some time, fully functional journals have only become available recently, both as page image and as structured text, described later.
* The second "simple" rule is to write stories with impact--stories that make a difference to our organizations.
Simple Simon has launched his summertime range of perfect pies.
Instead of the customary mince pie why not leave a Simple Simon's Perfect Venison and port pie or a Duck and black cherry pie outside your bedroom door this year?