SIMPLE IRA choice of custodians
Can an Employer that establishes a SIMPLE force all employees to open SIMPLE at a designated firm or custodian or can each individual employee choose where they prefer to have their individual SIMPLE IRA?
Can an Employer that establishes a SIMPLE force all employees to open SIMPLE at a designated firm or custodian or can each individual employee choose where they prefer to have their individual SIMPLE IRA?
Permalink Submitted by Alan Spross on Thu, 2012-07-12 18:34
The employer has a choice and uses a different form for each situation. Here is the agreement for a plan where a designated custodian must be used.
http://www.irs.gov/pub/irs-pdf/f5305sim.pdf
If employer wants to change from employer choice to employee choice or vice versa, it should be effective for a calendar year and Notice should be sent out at least 60 days before end of year (by 11/1).
Permalink Submitted by Denise Appleby on Fri, 2012-07-13 13:33
[quote=”[email protected]“]Can an Employer that establishes a SIMPLE force all employees to open SIMPLE at a designated firm or custodian or can each individual employee choose where they prefer to have their individual SIMPLE IRA?[/quote]
to add…if the employer uses the Form 5304, employees can choose their own financial institution .
If the employer uses Form 5305-SIMPLE (and some prototypes) , employees must establish SIMPLE IRAs with the custodian that the employer uses. However, transfers are allowed within limited timeframes. Check the SIMPLE agreement