Jump to content

Handling a SIMPLE IRA plan when sponsor is acquired

Recommended Posts

Employer has a SIMPLE IRA and is being acquired. I know the rule is the employer must give notice to employees they plan to discontinue contributions by November 2. However for participants to roll over to any other IRA or plan they must have been in the SIMPLE for 2 years. Do you keep the SIMPLE plan open for 2 years even though the employer is going to sell its assets and presumably be dissolved so everyone can rollover to a non simple plan? Can you discontinue without terminating the plan?  

i understand the transition rules and i am guessing part of the reason is because of the 2 year rollover restriction. 

Link to comment
Share on other sites

  • Dave Baker changed the title to Handling a SIMPLE IRA plan when sponsor is acquired

No, you don't worry about the accounts.  A SIMPLE IRA is structured where the only thing the Employer has to worry about is the provisions for making contributions.  After those contributions are actually made (and funded), then EVERYTHING is in the hands of the participants.  Hence, each participant is solely responsible for their own SIMPLE IRA account.

Good Luck!


Link to comment
Share on other sites

can the acquiring company maintain the simple plan until the end of the year in order to allow the employees the ability to fund until december 31 even though they are now working for the acquiring entity? 


i would think yes and the transition rule protects them concerning the exclusive plan and the 100 employee rule. 

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...