Simple-IRA
|
Who is eligible to participate?
|
|
|
|
Any type of of public or private company or non-for-profit organization with no more than 100 employees who earned $5,000 or more during the preceding year.
|
|
|
The plan can require employees to have earned at least $5,000 during any 2 preceding years and have expected earnings of $5,000 in the current year (indexed).
|
|
|
Who contributes?
How much?
|
Employers must make mandatory contributions based on one of two formulas:
1. 100% match of employee contributions up to 3% of compensation (can reduce 3% to 1% in two out of every five years.)
2. 2% of compensation to all employees earning $5,000 or more in current year.
Employees may elect to make salary reduction contributions based on a percentage of income, subject to Internal Revenue Code limits.
|
|
|
When are contributions vested?
|
Employer contributions are 100% vested at the time of contribution. Employee contributions are 100% vested at the time of contribution.
|
|
|
How can funds be accessed?
|
Withdrawals made prior to age 59 ½ incur a 10% early withdrawal penalty, unless a permitted exception applies.*
In addition, if the withdrawal occurs within 2 years of initial participation the penalty increases to 25%. Tax-free rollovers are permitted solely to another SIMPLE- IRA plan.
|
|
|
What special administrative requirements are associated with the plan?
|
Nondiscrimination testing and "top-heavy" testing is not required. Form 5500 and ERISA disclosures are not required.
|
|
When you are ready to establish your plan or if you still have questions, contact our Business Banking Service Center at 1-888-489-2265.
| 
;)
Checks and Forms
