rfahey Posted July 3, 2014 Share Posted July 3, 2014 Client has had a matching SIMPLE IRA plan for many years now. They have hit a really big hole for their business in the last three months. This has resulted in layoffs, pay cuts, benefit reductions, etc. and even with these they may not make it. They are telling me that they cannot in any way continue to make matching contributions to the SIMPLE. If they stop the employer match they are wondering if the can let employee keep deferring until they can turn things around or they are out of business. What can I say to them under these circumstances ? Thank you Link to comment Share on other sites More sharing options...
Lou S. Posted July 3, 2014 Share Posted July 3, 2014 You don't http://www.irs.gov/Retirement-Plans/Terminating-a-SIMPLE-IRA-Plan Can I terminate or amend my SIMPLE IRA plan in the middle of the year?No, you cannot end your plan in the middle of the calendar year. Once started, you must continue your SIMPLE IRA plan for the entire calendar year, funding all contributions promised in the employee notice. Link to comment Share on other sites More sharing options...
Flyboyjohn Posted July 7, 2014 Share Posted July 7, 2014 Despite the IRS "no mid-year termination" stance you can't get blood out of the turnip so I would tell them to consult qualified counsel (assuming they have enough blood to pay counsel)as to what steps to take to blow up the SIMPLE "retroactively". Under no circumstances should they permit employees to continue to defer for the rest of the year. Link to comment Share on other sites More sharing options...
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