1% match first two years of SIMPLE IRA
I am curious if a 1% employer match is allowable for the very first two years of a SIMPLE IRAs existence. As I read IRS pub 590, it seems allowable, as long as “Employees are notified of the reduced limit within a reasonable period of time before the 60-day election period during which they can enter into salary reduction agreements.”
Can someone please confirm that the first two years can be 1% match, and also, how much time would be deemed to be a “reasonable period of time before the 60-day election period”?
Thank you!
Permalink Submitted by William Tuttle on Tue, 2015-03-31 04:18
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Permalink Submitted by Alan - IRA critic on Tue, 2015-03-31 04:54
The first two years can be reduced, but only the first two, then the 2 out of 5 year period will have reached it’s limit. There is no definition of “reasonable”, but it seems logical to provide at least a week prior to the 60 day Notice.