New SIMPLE IRA EligibilityPlan
Employer wants to start a SIMPLE IRA on Jan. 1, 2018. They distributed the notification of eligibility to employees and the notification states that employees need to be there 1 year and make $5,000. The question is, are the eligibility requirements different for a new plan than they would otherwise be for an existing plan? In other words, is everyone eligible since it’s a new plan and then going forward the eligibility requirements come into play?
Right now, employer is operating under the assumption that the only employees who will enter the plan on Jan. 1, 2018 are anyone who is currently there or hired between now and the end of the year and make at least $5000 this calendar year 2017. Is that correct?
Thank you.
Permalink Submitted by William Tuttle on Fri, 2017-10-20 00:24
With this notification, as long as an employee has received $5,000 in compensation in any (1) prior year (does not have to be 2017), they will be eligible on 1/1/2018. This is true even if they do not become employees until after 11/2/2017 as long as they receive $5,000 in 2017 compensation.