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SIMPLE IRA - amending the plan to change eligibility requirements

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Employer sponsors a SIMPLE IRA that allows employees to participate if they had $5000 during the preceding year and are expected to earn $5000 during the current year.

Employer wants to amend the plan to provide that any employees hired on or after 01/01/2015 will be eligible to participate in the plan if they had $5000 during any 2 preceding years and the same expectation of $5000 during the current year. The amendment will be effective 01/01/2015 so there is no mid-year amendment issue. The empoyer thinks they will hire a bunch of new employees and want to have them wait longer before becoming eligible.

Is there a problem with this amedment?

Thank you for any input.

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Don't do anything now.

When they re-up for 2015 in late 2014 by giving the Model Notice and copy of the SIMPLE document to eligible employees leave the eligibility as it is now ($5,000 in 1 prior year). The employees hired in 2015 will never see this notice.

When they re-up for 2016 change the eligibility to $5,000 in 2 prior years and you've effectively imposed the 2 year requirement on folks hired in 2015.

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