Simple IRA

[Jilliandiz]

Today is 10/20/03 and a client wants to set up a Simple IRA. Can I set it up to be effective for 2003 still or do I have to wait and have it effective 1/1/04? She would like to put money in for 2003.

[Appleby]

It depends on what you mean by “set-up”.

The deadline to establish the SIMPLE for 2003 was Between January 1 and October 1 2003. … However, establishing the SIMPLE means properly completing the required paperwork –… If the SIMPLE was established Between January 1 and October 1 2003, she may deliver the paperwork to you at anytime after this deadline to have you open the account to which the contributions for 2003 will be deposited, providing the account is established in time to receive a deposit of the first contribution…Remember that if salary deferral contributions are made, they must be deposited by the 30th of the month following the month to which the deferral applies…

[Gary Lesser]

Nice reply. It should be noted, however, that a plan subjct to ERISA must forward elective contributions as soon as they can reasonably be segregated from the employer's general assetst, but not later than the previously mentioned 30-day period required under the Code. [iRC Sec 408(p)(5)(A)(i); ERISA Sec 2510.3-102]