SIMPLE IRA Plan

[Guest TAG]

My understanding is that SIMPLE IRA funds can't be rolled into a 401k SH plan after SIMPLE is 2 yrs old.

Can a SH 401k plan be started mid year as a new plan and terminate SIMPLE IRA (contributions have been made to SIMPLE this year) or does 97-9 require that everything starts first day of the calendar year following amendment to terminate SIMPLE.

I appreciate all input.

Thanks

TAG

[Guest bmurphy]

TAG,

I believe that, beginning this year, you can roll a SIMPLE-IRA into a Safe Harbor 401k. I don't believe there is a 2-year participation limit in the SIMPLE as applies to rollovers to IRA's.

You cannot maintain a SIMPLE in the same calendar year as another qualified plan so you'd need to term the SIMPLE this year & start the SH k-plan next year.

Brian

[Guest TAG]

Bmurphy, thanks for your reply. Didn't notice the rollover rule for Simple IRA to SH401k changed in '02. Cool!

TAG

[Appleby]

The two-year period applies to any SIMPLE IRA transaction that involves moving the SIMPLE IRA assets to another retirement plan that is not a SIMPLE IRA.