SIMPLE Plans

​SIMPLE 401(K)

Employee Eligibility Requirements

Any employee earning $5,000 or more in any two prior years and expected to earn $5,000 in the current year.

Any employee earning $5,000 and the later of 21 years of age or 1,000 service hours in a prior year (may be less pursuant to plan terms).

Employee Deferral Limit

$13,000 per plan year, up to 100% of compensation

$13,000 per plan year, up to 100% of compensation

Employer Contribution Limit

If the employer elects the 3% deferral option, up to $8,400 annually ($280,000 x .03); if the employer elects the 2% deferral option, up to $5,600 annually ($280,000 x .02). Limits are per participant.

If the employer elects the 3% deferral option, up to $8,400 annually ($280,000 x .03); if the employer elects the 2% deferral option, up to $5,600 annually ($280,000 x .02). Limits are per participant.

Participant Loans

Not permitted

Permitted if allowed by plan document.

Rollovers

Permitted to IRA without penalty only after two years — may roll into another SIMPLE IRA prior to two years.

Permitted to IRA or qualified plan immediately.

Excise Tax

Withdrawals during the first two years subject to a 25% excise tax; 10% thereafter until employee attains age 59 1/2.

Withdrawals subject to 10% penalty tax on distributions prior to age 59 1/2.