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Setting Up a SIMPLE IRA Plan


“My client and I want to know if there is a deadline for establishing a SIMPLE IRA plan for 2017?”

ERISA consultants at the Retirement Learning Center Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs and qualified retirement plans.  We bring Case of the Week to you to highlight the most relevant topics affecting your business. A recent call with an advisor in New Mexico is representative of a common inquiry involving savings incentive match plans for employees (SIMPLE) IRA plans.

Highlights of discussion

  1. Do not maintain any other qualified retirement plans; and
  2. Have 100 or fewer employees who received at least $5,000 in compensation from the employer for the preceding year [IRC §408(p)(2)(c)(i) IRC §408(p)(2)(c)(i) [1] and IRS Notice 98-4, Q&A B4 [2]].
  1. Execute a written plan document (either a government Form 5304-SIMPLE [3] or Form 5305-SIMPLE [4], or a prototype plan document from a mutual fund company, insurance company, bank or other qualified institution);
  2. Provide notice to employees; and
  3. Ensure each participant sets up a SIMPLE IRA to receive contributions.


Business owners who are interested in establishing SIMPLE IRA plans must be aware of the deadline to do so, and the additional steps involved to ensure a successful and compliant set up.