A SIMPLE IRA plan is a Savings Incentive Match Plan for Employees, a type of salary- deferral plan established by an eligible employer including self-employed individuals. The plan allows each eligible employee to make pre-tax salary-deferral contributions. This means the tax on the money is deferred until it is distributed. This contribution is referred to as an elective-deferral or salary-reduction contribution. Under a SIMPLE IRA plan, employees and employers make contributions to traditional Individual Retirement Arrangements (IRAs) set up for employees. Employees own their accounts and are always 100% vested and are in complete control of their own accounts. It is ideally suited as a start-up retirement savings plan for small employers who do not currently sponsor any other type of retirement plan.

Employers are required to make either matching contributions, which are based only on elective-deferral contributions made by employees, or non-elective contributions, which are paid to each eligible employee regardless of whether the employee made salary-reduction contributions to the plan. For a matching contribution, the employer's contribution may match the employee ’ s elective-deferral contribution up to a certain dollar amount or a percentage of compensation.

Eligibility
Contribution
Distribution