Simple IRAs

Simple IRAs

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 2011	$28,000
Maximum Annual Employee Deferral 2011	$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