What is a SIMPLE IRA plan?

What is a SIMPLE IRA plan?

SIMPLE is an acronym for Savings and Incentive Matched Plan for Employees. Generally, any business with 100 or fewer employees can qualify; however, SIMPLE plans are only available to companies that maintain no other employer-sponsored retirement plan to which contributions are made or accrued during the pertinent calendar year.

Which employees must be included in the plan?

Although employers may elect less restrictive eligibility requirements, IRS rules require that all employees who receive at least $5,000 in compensation from the employer during any two prior calendar years and is expected to receive at least $5,000 during the current year must be included. When his eligibility period is met, an otherwise qualified employee enters the plan. The employer must then give the eligible employee at least a 60 day election period to enroll.

How much and how can retirement monies be contributed into a SIMPLE IRA plan?

Employee contributions were raised to a maximum of $10,500.00 ($12,500.00 catch up for employees over age 50) in the year 2007. Employers must choose from one of two contribution alternatives: matching or non-matching.

Employers choosing matching contributions must contribute the lesser of the participating employee’s salary deferral or 3.0% of such participant’s compensation. Employers choosing non-matching contributions must contribute 2.0% of each eligible employee’s compensation up to a maximum compensation amount of $225,000.00.

Eligible employees, on the other hand, can defer the lesser of 100% of compensation or $10,500 ($12,500 catch up for persons over 50 years of age).

How do I enact a SIMPLE IRA plan?

A prudent employer will seek a tax professional’s advice, before enacting or contributing to any pension plan. He is also advised to gain such advice on an ongoing basis for assistance with plan administration.

Once this advice is received, any small business owner can call Providence to do the rest. Individual SIMPLE IRA s will be set up for all eligible employees. Those IRAs, in turn, will be funded by good interest fixed income annuities.

News

22
May

Visit from seminarians from St. Basil Seminary

Three seminarians from St. Basil Seminary in Stamford, CT visited Providence Association!

22
May

Bishop Soter Ortynsky Academic Scholarship Program

BENEFITS   The Providence will award up to five (5) one (1) time scholarships of $1,000 to eligible members.     ELIGIBILITY AND REQUIREMENTS FOR ACADEMIC SCHOLARSHIP   Each applicant must be a member in good standing of the Providence …

14
May

Candidates for the Board of Directors

Providence Association is looking for candidates for the Board of Directors.   We are looking for members of the association who have one or more of the following core competencies: Insurance industry expertise; Accounting or Finance expertise; Business experience; Leadership …

14
May

ELECTION OF THE GENERAL ASSEMBLY

Providence Association will be holding elections this autumn for term 2018-2022 Specifications about elections are excerpts from the Providence Association’s Bylaws Every qualified member of “The Providence” who is a practicing Catholic, of upright character, between the ages of 21 …