Simple K Plan - to reg K Plan

[HarleyBabe]

Simples aren't my expertise. Company wants to switch from a Simple to a traditional K Safe Harbor Plan. Can they do this during the same year or does the 12 month wait apply for a new K Plan? Also, assume the Simple funds can roll in? I assume there are methods of terminating a Simple K Plan similar to traditional?

Thanks

[rcline46]

Is the current plan a SIMPLE IRA or a SIMPLE K - big difference. I will assume you were correct in saying it is a SIMPLE K. Just amend the plan as of 1/1/2014 to what you want. 2013 is a lost cause because it is a SIMPLE

[HarleyBabe]

What if it's a Simple IRA. You know, it could have been a Simple IRA. If that's the case, what are the steps? Thank You.

[401king]

If it's a SIMPLE IRA and the SIMPLE has been funded this year (2013) then they must wait until 01/2014 to start a 401(k) Plan. At that point, you're just terminating the SIMPLE and starting fresh with a 401k. SIMPLE account holders may rollover their SIMPLE to the 401k (provided it's been two years since the initial deposit).

[ETA Consulting LLC]

(provided it's been two years since the initial deposit).

Keep in mind the two years apply "ONLY" in the event the individual isn't exempted from the 10% early distribution penalty. Hence, if the individual is age 59 1/2, then there isn't a two year period.

Just a little clarification. But, I agree with everything you stated.

Good Luck!