Simple match in short year

[Guest Christie Banks]

If an employer adopts a Simple plan in August, is the match calculated based on earnings for the entire year, or just for earnings on the wages since adopted? Thanks!

[Appleby]

For the entire year- assuming you are using the IRS model 5305 or 5304 SIMPLE. These documents define compensation as the amount reported on the participant's w-2.

Though highly unlikely, a prototype SIMPLE document may provide an alternate definition of compensation.

[Gary Lesser]

Prototype LRM language also requires compensation for the entire CY be used.