Guest Moe Howard2 Posted July 18, 2005 Report Share Posted July 18, 2005 An S-corp starts a Simple-IRA. The corp has 4 employees .....1 owner employee & 3 regular employees. All 4 of them meet the eligibility requirements. The owner is the only active participant. The other 3 employees declined to participate in the plan for it's 1st year. Prior to the plan's first year, the owner walked through the office and informed each employee that the corp will match 3% for each eligible employee who elects to defer in the plan's first year. None of them choose to participate. So the owner was the only participant (he deferred $9,000 and the corp matched him at 3% in the 1st year). The plan's 2nd year began 01/01/05. Again, none of the employees choose to participate in the second year. But the owner never informd the employees if the corp would match 3% in the 2nd year for participating employees or contribute 2% in the second year for all eligible participants. How is the corp penalized for not having pre-informed eligible employees about the 3% or 2% requirement ? Will such failure prevent the owner from receiving a match ? Link to comment Share on other sites More sharing options...
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