SIMPLE IRA termination and change in eligibilty

[Guest lskin]

I have searched everywhere that I can think of and cannot find the answers to these questions

Would it be okay for an employer to terminate a SIMPLE IRA mid-year?

Also would it be okay for an employer to change employee eligibility requirements mid-year for the current year?

[Guest GRobert]

Generally an employer can not terminate a SIMPLE IRA mid-year. If the employer is going out of business then when the business shuts down the SIMPLE ends.

The employer can not change eligibility requirements mid-year, nor can they change the match type that they are doing (i.e. changing from 100% match up to 3% of compensation to the 2% non-elective contribution for all eligible employees). Sufficient notice must be given to all employees of any changes that will be done effective at the beginning of the next plan year and the employees must be given an opportunity to change their elective deferral amounts depending on the changes made by the employer.

[Appleby]

You may want to check out the posts at

http://benefitslink.com/boards/index.php?s...=0entry118879

http://benefitslink.com/boards/index.php?s...=0entry117029

http://benefitslink.com/boards/index.php?s...=0entry101169

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[Guest lskin]

Thank you so much