Jump to content

Expanding SIMPLE Investment Providors


Recommended Posts

The subject company has an operating SIMPLE IRA plan established through Nopain-Nogain Mutual Funds. I haven't read the plan document, but I am assuming it designates Nopain-Nogain as the only financial institution that can accept IRA contributions. The employer would like to offer increased investment options to their employees by opening the plan up to include investments from BrandX Mutual Funds too.

Section Section 219(g) describes the types of plans which an employer cannot make contributions to during the same year they make contributions to a SIMPLE plan. The plans listed in Section 219(g) include SIMPLE plans, therefore it appears an employer cannot have two SIMPLE plans during the same year.

So, I am concluding that the only way to acheive what the employer wants is to wait until the end of the year, terminate the current SIMPLE plan with the designated financial institution, and adopt a new plan without a designated financial institution effective January 1st. (And providing at least 60 days advance notice of the change) This will open the plan up so that the employees will be able to direct their IRA's be placed anywhere, and not just limited to Nopain-Nogain and BrandX. Is there any way to limit the plan to just these two investment sources (who are competitors)?

Link to comment
Share on other sites

You are correct, an employer may have only one SIMPLE-IRA plan. Each institution may want a copy of the plan document. If they accept the account as a SIMPLE-IRA then the employer is okay. In many cases, they will accept contributions under a model plan provided they do not object to or have their own "add-on" language.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...