Simple IRA Employer Contribution Formula
Secure 2.0 increases the SIMPLE IRA annual salary deferral limit and the age 50 catch-up contribution for certain SIMPLE plans by 10% – only for those employers with 25 or fewer employees in the preceding calendar year. This increased participant deferral limit applies automatically for those employers with up to 25 employees
Employers with more than 25 employees can elect to apply the increased deferral limits. Such employers (those with 26 or more employees) can allow for the additional 10% only if they provide for a fully vested 4% (instead of 3%) matching contribution or a 3% (instead of 2%) non-elective contribution
Question
Can an employer that has less than 25 employees – make a 4% match or 3% non-elective contribution?
Thanks!
Permalink Submitted by Alan - IRA critic on Mon, 2024-08-26 17:16
Apparently then cannot, because Secure 2.0 only mentions the increased employer match limits when the employer with 26+ EEs makes an election to apply the increased 10% limits. And because the increased 10% limits are automatic for <26 EEs, there is no election for the employer to make.