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The Savings Incentive Match Plan for Employees using Individual Retirement Accounts
(SIMPLE IRA) is a retirement plan for employers with no other plans and with 100 or
fewer employees earning at least $5,000 for the prior year.
Employer Benefits
- Start-up expenses are more reasonable and compliance requirements are less
restrictive compared to other retirement plans
- There are relatively few administrative burdens
- Employers can deduct contributions
- The tax law requirements are less stringent
Employee Benefits
- Eligible employees, including self-employed owners, may defer a significant
part of pre-tax compensation (adjusted annually for inflation) a year into
their own IRA accounts
- Employers generally have to match employee elective contributions dollar
for dollar, up to a small percentage of the employee's compensation. The employer
has the option to elect a higher match
- All contributions to the plan are immediately vested
- Employees choose how they want to invest their plan assets
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