Principles of Risk Management and Insurance, 13th Edition

Simple IRA Plan

A Savings Incentive Match Plan for Employees (SIMPLE) is a SIMPLE retirement plan that allows employees and employers to contribute to a traditional IRA established for the employees. Such plans are limited to employers that employ 100 or fewer eligible employees and do not maintain another qualified plan. Under a SIMPLE IRA plan, smaller employers are exempt from most nondiscrimination and administrative rules that apply to qualified plans.

Eligible Employees

All employees who have earned at least $5,000 from the employer during any two previous years (whether or not consecutive) and who are reasonably expected to earn at least $5,000 during the current year must be allowed to participate in a SIMPLE IRA plan. Self-employed individuals ...