SIMPLE to 401k

[Guest Bob Monte]

Can a SIMPLE that was started Nov 2001 (which I believe now satisifes the 2 year rule) be rolled over to a 401-k without penalty, problems, etc.

[Gary Lesser]

The 2-year period begin on the date the individual first participated in the SIMPLE IRA of the employer. After that period has expired, the amount may be rolled over into another SIMPLE IRA, QP, 403(B) plan or eligible gov't Code Section 457 plan that specifically allows for rollovers from a "SIMPLE-IRA" (which is not, even after two-years, a "traditional" IRA).

Here, the two year period can't expire until 2003 (assuming contributions were made in 2001).

[Guest Bob Monte]

Thank you for your reply. I should have specified that it was the employee contribution that I was talhing abou. Since your answer did not menetion ee or er, I assume that both parts or either can be transferred. Correct?

One part that I am still a little fuzzy on When aSIMPLE is begun, its effective date is the beginning of the year. So a plan that starts in Nov 2001 has a date of 1/01 and I thought that this whole year would then count towards the 2 year rule regardless of when the plan was opened or the first money put in. Therefore ANY plan first opened and contributed to at ANY time in 2001 can be converted now since all of 2001 and 2002 count and the two years was satisified 1/1/03. Can you comment, agree, disagree, clarify.

[Gary Lesser]

The 2-year period begins on the date the individual first participated in the SIMPLE IRA of the employer; that is, the date the first contribution was made into the SIMPLE-IRA account or annuity.

[Guest Bob Monte]

Thanx, I guess I am reading things wrong. That's why this is so nice; to get the professional and correct interpretation.

[Your welcome, thanks for yourparticipation - gsl]