SIMPLE (Savings Incentive Match Plan) & Safe Harbor Analysis and
Comparison – SBJPA ‘96
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CATEGORY
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SIMPLE
IRA
|
SIMPLE
k
|
SAFE
HARBOR k
|
TRADITIONAL
k
|
|
Eligible
Employer |
100
employees or less / $5,000 or more compensation |
100
employees or less / $5,000 or more compensation |
Any
employer |
Any
employer |
|
Availability |
January
1, 1997 |
January
1, 1997 |
January
1, 1999 |
YES |
|
Additional
Qualified Plans Permitted |
NO |
NO |
YES |
YES |
|
Employee
Eligibility |
2
Years Service $5,000
or more compensation |
1
Year of Service 1,000
Hours |
1
Year 1,000
Hours |
1
year 1,000
hours |
|
Contributions
A. Deferrals
B. Required
Match
or
C. Required
Profit Sharing
D. Discretionary |
$6,000 100%
up to 3%* or 2%
for eligible** NO |
$6,000 100%
up to 3% or 2%
for eligible** NO |
$10,000 100%
up to 3%, 50% up to 5% or 3%
for eligible NHCE’s Yes |
$10,000 NONE
@Sponsors Discretion or NONE
@Sponsors Discretion YES |
|
Vesting |
100% |
100% |
100% |
100%,
3 yr.Cliff or 6 yr. Graded |
|
Top Heavy Testing |
NONE |
NONE |
YES |
YES |
|
Reporting &
Disclosure Requirements |
Form
5305 SIMPLE |
Form
5500 and Summary Plan Description on request |
Form
5500 and Summary Plan Description on request |
Form
5500 and Summary Plan Description on request |
|
Employee/Participant
Notice |
60
Days (prior year) |
60
Days (prior year) |
Reasonable
time (prior
year) |
Reasonable
time (prior
year) |
|
Portability |
Total
to IRA |
Rollover |
Rollover |
Rollover |
|
Employee Election |
Prior
Year 60 days |
Regular |
Regular |
Regular |
|
Fiduciary
Responsibility |
Limited
like 404(c) |
404(c) |
404(c) |
404(c) |
|
Early
Withdrawal Penalty (72t) |
25%1st
2 years, 10%
after 2 year |
10%
Hardship |
10%
Hardship |
10%
Hardship |
|
Participant Loans |
NO |
Permitted |
Permitted |
Permitted |
|
*May
be adjusted to 1% for 2 out of 5 years with 60 days notice to employees **$5,000
or more of compensation |
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