Simple IRA Waiting Period
Have a client with a Simple IRA. Him and one employee are currently on it. His wife started working as an employee in August. He has a one year waiting period, but would like to get his wife on now. He also has two new employees hired within the last 3-4 months. He doesn’t mind if they become eligible two. Can he simply ammend the plan to allow for a shorter waiting period? Say 3 months? Thank you.
Permalink Submitted by William Tuttle on Thu, 2021-10-14 19:32
You can not make mid-year amendments.
Participant eligibility is only in yearly increments (0, 1, 2).
If you already have a one year eligibility. Participation will be based on the required and actual prior year compensation.
If you have the default $5000 prior year compensation requirement. You could adjust this to fine tune who is eligible and who is not.
You only have until the 11/2 notification/enrollment deadline to make any changes for 2022.