Hello,

A company set up a SIMPLE plan in 2023. They never made any contributions. Now they want to set up a SEP plan instead for 2023 and use the SIMPLE plan for 2024. Would this be allowed? Even though no SIMPLE contributions were made, I would think this would violate the one-plan rule required by the SIMPLE rules? The business owner thinks that the one-plan rules hinges on whether contributions were made and that they could technically keep both plans active and decide year to year which plan to fund and as long as both aren’t funded in the same year, it would be fine. Do you have any thoughts or feedback on this?