Stephanie M.
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Impose Service Requirement on SIMPLE IRA?
Stephanie M. replied to Stephanie M.'s topic in SEP, SARSEP and SIMPLE Plans
Can I ask one clarifying question ... using the example above with an employee hired in August 2024 ... if they DON'T earn $5,000 in 2024, their next possible window (depending on our Article 1 election) is January 1, 2026. Is that correct? -
Impose Service Requirement on SIMPLE IRA?
Stephanie M. replied to Stephanie M.'s topic in SEP, SARSEP and SIMPLE Plans
Thank you! -
In the past, we have allowed employees to start contributing to our SIMPLE IRA as soon as they (1) completed 12 months of continuous service; (2) earned $5,000 in that 12 month period; and (3) were reasonably expected to earn $5,000 in the next 12 month period. As a result, employees were entering the plan at all dates during the year based on their hire date. I don't think this is correct. It appears that SIMPLE IRAs all have a January 1 entry date and only compensation can be used to determine eligibility. For example, an employee hired in August 2024 could enter the plan January 1 2025 as long as they earned $5,000 in 2024 and are reasonably expected to earn $5,000 in 2025. Is that correct? Thank you!