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Simple IRA
Benefits & Compensation
Simple IRA
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
I am researching options other than a 401(k) plan for a small employer (<50 ees) with <20 current plan participants and pretty low annual contributions (<100K).
I've researched the Simple
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Forums » Topic Forums » Benefits & Compensation » Simple IRA
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Simple IRA
posted at 4/21/2010 9:36 AM EDT
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Posts: 108
First: 2/1/2007 Last: 9/9/2010 |
I am researching options other than a 401(k) plan for a small employer (<50 ees) with <20 current plan participants and pretty low annual contributions (<100K).
I've researched the Simple IRA and it seems like it may be a good option for this employer. I'm wondering if anyone has any experience with this type of plan. If so, what are/were your thoughts? |
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Simple IRA
posted at 4/21/2010 11:03 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
Here's a good article about the difference:
http://www.fundamentalfinance.com/401k/401k-vs-simple.php Personally I would still stick with a 401k. We found that our TPA charged about $20 a participant a quarter and the recordkeeper was feeless.....(or should I say those fees were taken into account on the returns on the investments? which is probably more accurate!) If your plan has safe harbor testing, you can even get around nondiscrimination testing. I don't remember the advantages of a SIMPLE plan over a 401k, but can say that a 401k with a small population is not hard to deal with.....if you have a good TPA and a good recordkeeper (I suggest American Funds). |
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Simple IRA
posted at 4/22/2010 8:19 AM EDT
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Posts: 24
First: 1/25/2005 Last: 4/1/2011 |
We have a SIMPLE IRA, and similar stats to yours: < 50 EEs, under $100,000 in contributions (I would say significantly under), etc.
It's good if you have a good TPA, and bad if you don't. Ours isn't so great and we're looking to change plans in our next FY. In terms of administration, it's easy and inexpensive. |
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Simple IRA
posted at 4/23/2010 3:21 PM EDT
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Posts: 3
First: 4/23/2010 Last: 4/24/2010 |
We have a simple plan and wanted to change to a 401k this year. However the simple plan is NOT simple to discontinue. You can only discontinue it at a certain time of the year, and you cannot start a 401k plan within the same year. |
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Simple IRA
posted at 4/25/2010 1:07 PM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
Good point about the timeframe between termination of one plan and the start of another plan. There will be issues there.
Also think about whether your company expects to grow in the next few years or hold status quo. That could make up your mind for you also. |
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