Are catch-ups in SIMPLEs matched

[Santo Gold]

In a SIMPLE IRA plan that allows for catch-up contributions and the employer contribution is in the form of a matching contribution, are catch-up contributions matched:

(1) all of the time

(2) none of the time

(3) at the discretion of the plan sponsor

Thanks

[rcline46]

I thought the match is 100% to 3% of pay. The deferrals large enough to invoke a catch up have to be far in excess of 3% of pay, so how is catch up even invoked here?

[Santo Gold]

Compensation is not capped when using the match in a SIMPLE IRA. So, if the participant is age 50 and has compensation of $466,666.66, he could defer $11,500 plus $2,500 in catch up and be at 3% of pay for deferrals. Would the match be $11,500 or $14,000?

Thanks

[rcline46]

Let me know who makes that and has a SIMPLE IRA, he needs a real plan!

[Santo Gold]

It's not me unfortunately, but it is apparantly an accurate description of a possible new client of mine.

[rcline46]

Santo - I see nothing that limits the match. You have a wonderful opportunity to do some consulting here if the facts hold.

[Belgarath]

I think that arguably it is optional, as under 414(v) the plan is not trreated as failing to satisfy the normal 408(p) requirements (which include the 3% match) due to a catch-up. However, as a practical matter, if you are using the IRS SIMPLE form, then as Rcline mentioned, there's nothing there that would appear to allow it to be optional.