adopting a SIMPLE-IRA

[Guest Mike Kimball]

How late in the calendar year can an employer establish a SIMPLE-IRA plan, considering the 60 day notice requirement and the requirement that a SIMPLE plan can only be effective between Jan 1 and Oct 1??

[Belgarath]

October 1 is the latest you can adopt the SIMPLE.

[Guest Mike Kimball]

When would the 60 day notice have to be given to make a simple plan effective by 10/1? Or does the notice period apply? I know that for safe harbor 401(k) plans the notice requirement is tied to the effective date of the plan, but is that true with simple plans as well?

[Belgarath]

I'm going from memory here - always a dangerous thing to do, but as I recall, the "60 day" election period, for the first year of a SIMPLE plan, must include either the date the employee becomes eligible, or the day before.