When can an employee start deferring to a SIMPLE Plan

Submitted by Wendy Mommaerts on Mon, 2016-10-17 19:03

We have a SIMPLE plan that was established in 2015 with the following qualifications of when an employee can enroll into the plan: “employees who have received at least $5,000 in compensation during any 2 preceding calendar years (whether or not consecutive) and who are reasonably expected to receive at least $5,000 in compensation during the current year”

Would 2018 be the first year eligible employees can enroll?

2015 & 2016 would be the 2 prior years of compensation
2017 would be referring to the current year of compensation
2018 would be the 1st year eligible for enrollment

Or am I thinking too much into this?



Submitted by Alan - IRA critic on Mon, 2016-10-17 19:42

  • Employee has the two prior years in 2015 and 2016. In addition if that employee is expected to receive 5,000 in the “Current year” which will be 2017, the employee is eligible 1/1/2017. They do not have to wait until 2018.
  • Also, note that even though the SIMPLE was established in 2015, if this same employee earned 5,000 in 2014, they would have been eligible for coverage 1/1/2016. In other words, earnings years before the SIMPLE was adopted do count.

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