SIMPLE-IRAs: minimum contributions?

[Guest amfam2]

Can a financial institution who is NOT a "designated financial institution" impose a minimum contribution requirement in order to open a SIMPLE IRA account at that institution?

As I read Notice 98-4, Q & A D-2, it mentions that the employer cannot impose a maximum.

I'm thinking that since the SIMPLE is not w/a DFI, any financial institution can impose a minimum contribution in order to open the account. Some financial institutions may want to impose a minimum contribution amount to circumvent having to open a SIMPLE IRA account for an individual who elects to have only $5/$10/$15 withheld per pay period. For some financial institutions, the account would not be profitable to administer.

My second question is if you are aware of financial institutions who do in fact require a certain minimum contribution, how do they handle disclosure to the participant of that fact?

[Gary Lesser]

The plan can not impose a restriction, but an investment minimum is okay, so long as there is at least a CM account to hold the IRA assets until the investment minimum is reached. Other than in the prospectus, no disclosure is necessary.