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Guest BED

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Guest BED

Even though I have been practicing in ERISA for 30 years, I did not get my first Simple IRA question until last month. It is a different set of rules, and maybe someone has the answer.

In addition to a lot of other problems, there does not seem to be a Summary Description as required by 408(l)(2)(B) after the first year of the plan (2001). The statute (as well as the IRS form) indicate that the "trustee"/"financial institution" should supply the Summary to the employer each year. The financial institution is stating that generating the Summary and providing it to the eligible employees is the responsibility of the employer. I agree that distributing it to the employees is an employer responsibility, but is there something that shifts responsibility for preparing it to the employer which is the entity that is supposed to receive it.

The financial institution is also denying that it is the trustee even though the preprinted form from the current FI's predecessor states that it is the trustee. No successor document was generated when the current FI acquired the predecessor's business.

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You would provide the employee with a copy of the Form 5304 with instructions. You would also provide them a copy of the financial institutions procedures for taking withdrawals from SIMPLE IRA accounts that are set up at their institution. That should satisfy the Summary Description requirements.

Good Luck!

CPC, QPA, QKA, TGPC, ERPA

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