Can a participant voluntarily opt out of SIMPLE plan?

[Guest ssargent]

A participant eligible to participate in his employer's SIMPLE plan has stated he wants to opt out of the plan. Reason is unknown. Everything I find says contribution must be made for all eligible employees without reference to any who may not WANT to benefit. Is this possible, and must the required contribution be given to the participant in the form of cash if he refuses to accept an IRA contribution?

Above assumes employer is making a 2% non-elective contribution in lieu of the 3% matching, as obviously this EE chooses not to make elective contributions.

[Bill Berke]

I believe you are corrrect, the employee cannot elect out of the 2%. But, then why not evaluate switching the formula? Is the 2% cheaper than the match formula? Or is this a company philosophical decision to benefit all eligible employees?

[Gary Lesser]

An eligible employee can not elect out of the 2 percent nonelective contribution under a SIMPLE IRA. The employer must open the SIMPLE IRA in behalf of the employee if the employee is unwilling or cannot be located.