SIMPLE IRA Employee Contributions
Hello, a company is making their annual SIMPLE employer contribution and one of the eligible employee passed away in September of this year. Would the employer still need to make the contribution for this year since the client has passed away? If the employer is allowed to make the contribution would these funds be able to be passed along to the beneficiaries of the deceased? I have not came across this before and I’m just looking for any feedback.
Thank you.
Permalink Submitted by Alan - IRA critic on Tue, 2018-09-25 16:32
Yes, the contribution must be made and that is clear from IRS guidance. However, the mechanics would vary depending on whether the SIMPLE IRA plan still exists, and whether the beneficiary has had the account transferred or re titled. Perhaps the matching contribution would just be paid in cash to the beneficiary, but in that case tax deferral is lost.