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Simple Plan over 100 employees


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We have a client that maintains a simple plan and has exceeded the 100 employees for several years while still contributing to the plan They have gone past the grace period so it looks like to me the only correction is through VCP filing. We have told them to cease contributions and deferrals.

I can't seem to find any information on if there are sanctions for this error. The fee for filing is 250.00. Does anyone know and have any experience with a situation like this.

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No sanctions that I'm aware of. Yes, VCP fee for SIMPLE IRA in this situation would be $250. I'd make sure, before you file, that everything else was done properly - proper eligibility, match dollars, etc., etc., because if there are any other errors, you can correct them in the same submission.

After you do your checking, if by some chance you find you have Excess Employer Contributions, and you propose to retain them in the plan, then the VCP fee is increased.

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