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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 simplification transactions are intended to simplify the organisational structure of the Alliance Partnerships, increase investor transparency, attract a broader investor base to a single, larger entity with increased public float and greater liquidity and eliminate the duplicative costs required to maintain two public companies.
Spivey turned to two other simplification projects, which narrowed the requirement to recognize modifications to a share-based award and clarified the presentation guidance for pension and other postretirement benefit costs.
Developing an enterprise (big) data strategy is crucial to simplification efforts and should focus on a unified data architecture for simpler and more futuristic management of enterprise information.
This method mainly calculates the matrix [Q.sub.v,q] of each vertex in different frame models of animation, as shown in formula (3), to estimate the errors each vertex pair ([v.sub.1], [v.sub.2]) produces during the simplification process and then to decide which vertex pair should be simplified first, as shown in formula (4).
Drawing upon John Law's (2011) notion of "collateral realities," they argue that this type of alcohol epidemiology undertakes numerous processes of simplification in its attempts to enact order and thus make useful statements about alcohol and alcohol effects.
Il a, en outre, appele le ministre delegue charge de la Fonction publique a definir sans delais un calendrier pour simplifier les procedures en coordination avec la CGEM, et en harmonie avec le programme annuel de la Commission nationale chargee du climat des affaires, en commencant par les procedures dont la simplification ne requiert pas une revision de textes juridiques.
A SMALL business support group has called for radical tax simplification in next week's Budget.
London, United Kingdom, July 23, 2010 --( The newly established Office of Tax Simplification will provide welcome respite for the financially challenged contingent of SMEs across the UK, says ACCA (the Association of Chartered Certified Accountants).
The Belgian EU Presidency promises to work hard on simplification of administrative procedures for researchers.
The Brussels minister further notes that administrative simplification will be one of the two priorities on the agenda of the informal Research Council, to be held in Brussels on 15 and 16 July.
ISLAMABAD, 09 April ,2009 (Balochistan Times) --National Electric Power Authority (NEPRA) has announced simplification of license procedures and a major cut in the license fee for small scale renewable energy projects.

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