Pioneer Investments: SIMPLE IRA


	Small Business Plans

	Uni-K

		About Uni-K

		Uni-K Roth

		Who Should Consider

		Contributions

		Benefits

		Loans

		Roth Rollover Guidelines

		FAQ

		Uni-K Calculators

	Uni-DB

	SEP IRA

	SIMPLE IRA

	Age-Based Profit Sharing


Home Retirement Center Small Business Plans SIMPLE IRA

SIMPLE IRA

Firms with 100 or fewer employees can establish a SIMPLE IRA – an employee savings program that in some ways resembles a 401(k). Employees can make pretax contributions through payroll deduction for 2008 of up to $10,500 ($13,000 if age 50 or older) per year. Employers pay no administration costs and direct all contributions to individual SIMPLE IRAs. Since employer contributions are required each year, this plan makes sense for businesses with predictable income.

Who May Establish	Employers with 100 or fewer employees, including sole proprietors, partnerships, corporations, government and nonprofit and entities. Must be employer’s only plan.
Establishment Deadline	January 1 through October 1.¹
Contribution Deadline	Employee contributions withheld each pay period. Employer contributions by tax filing date including extensions.
Who Contributes	Employer and employees.
Annual Contribution Limit²	Employees can defer up to $10,500 ($13,000 if age 50 or older) in 2008 with no percentage of pay limit. Employer makes additional required contributions.
Contribution Requirements	Employer must make required 3% match or 2% of pay contribution for eligible employees each year.³
Employee Eligibility	All employees earning $5,000 or more in any two prior years and expected to earn $5,000 in current year.
Vesting	Always 100% for both employer and employee contributions.
Withdrawals	Allowed anytime, subject to income tax. A 10% penalty (25% during first two years of participation) may apply before age 59½.
Loan Feature	Not available.
Plan Administration	None.

Employee notice must be given before plan establishment date.
For 2007, up to $10,500 ($13,000 if age 50 or oler).
Employer may reduce match below 3% (but not below 1%) in two of every five years.

This material is not intended to replace the advice of a qualified attorney, tax advisor, investment professional, or insurance agent. Before making any financial commitment regarding the issues discussed here, consult with the appropriate professional advisor.