Hello,

I was wondering if I could get your thoughts on the following situation:

Company A is in the process of acquiring additional companies and will be absorbing some of their staff. Company A currently has a SIMPLE IRA Plan and will be transitioning newly acquired employees over to the SIMPLE IRA plan. The SIMPLE plan currently has the stipulation that, to qualify, the employee must have made $5000 in the previous year and will make $5000 in the current year.

1. I know 401ks allow you to grandfather service in an acquired company so employees can participant right away in the plan for the new company. Is this possible in a SIMPLE Plan?

2. Can Company A stipulate that service at the prior company count towards the SIMPLE plan so the newly acquired employees can participate right away?

3. Could this be allowed if stipulated in the purchase agreement?

Any help would be greatly appreciated.