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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 2013 of up to $12,000 ($14,500 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.
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| 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
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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
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Employees can
defer up to $12,000 ($14,500 if age 50 or older) in 2013 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
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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
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None. |
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Before investing, consider the product’s investment objectives, risks, charges and expenses. Contact your advisor or Pioneer Investments for a prospectus or summary prospectus containing this information. Read it carefully.
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