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Business Retirement Plans |
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SIMPLE IRA |
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| Employer Characteristics | No more than 100 employees, all taxable business, government entities & tax-exempt organizations |
| Who Must Be Covered | Any employee earning more than $5,000 during any two preceding years & who is expected to earn at least $5,000 in the current year; can exclude certain employees. |
| Maximum Allocation 2010 | $28,000 |
| Maximum Annual Employee Deferral 2010 | $11,500; catch-up contribution of $2,500 if 50 years of age or older |
| Required Employer Contributions | -Dollar-for-dollar match up to 3% of pay (match may be reduced to as low as 1% for two of the five years) or -2% of gross pay up to $225,000 for all eligible employees who earned at least $5,000 during the year. |
| Vesting | Immediate 100% vesting. |
| Top-Heavy Testing Required | No |
| Who Controls Distributions | Employee |
| Advantage of this type of plan |
-Minimal paperwork & expense -Minimal tax filing -Employee deferral of current taxes -More flexibility with contribution amounts due to increase in deferral limit |