Counting 100 employees for a SIMPlE plan

[Tom]

Employer is approaching 100 employees.  Only 4 participate in the current SIMPLE plan.  They are eligible but don't participate and most don't speak English.  It is an egg farm.  You do wonder if they know they are eligible.  Most employees hold a permanent resident card but that expires in the next couple years.   

I see the IRS 100 employee prior year rule with wages of at least $5,000.  I don't think any type employee can be excluded from this count.  It's simply $5,000 or more.  I don't know that a 401(k) would be worth the trouble with auto-enrollment, etc.  The new plan would like to be referred to us which I'm not sure I would even want!

Comments?  I doubt classes of employees can be excluded from a Simple IRA count.

Tom

[Peter Gulia]

Consider that there might be a few years’ grace before the employer no longer may maintain a SIMPLE. For details, see Gary Lesser’s and Denise Appleby’s SIMPLE, SEP, and SARSEP Answer Book.

Also, does the employer have workers in a State with a play-or-pay law that calls an employer to allow retirement savings? If so, a plan with a § 401(k) automatic-contribution arrangement might not burden an employer much more than would recording and paying over automatic-contribution wage-deduction contributions to IRAs the State arranged.

If no State’s play-or-pay law applies, much might depend on what the business owner prefers to do for herself.