SEP IRA

SIMPLE IRA Contribution Limits, Continued

When must the employer provide annual SIMPLE IRA Plan notices to employees?

All eligible employees (including both employees who are already contributing and employees who have not yet contributed) must receive

immediately prior to the 60-day election period before the effective date of the Plan (for the first plan year, the effective date must be no later than October 1), and, thereafter, 60 days before the start of each year (i.e., November 2).

The required notices can be located in the SIMPLE IRA Employer IRA Agreement.

Example: ABC Company establishes a SIMPLE IRA Plan, effective October 1, 2004. The employer notifies employees regarding the 2004 Plan year by providing copies of Appendices A, B and C to employees on or before October 1, 2004.

The employer must then notify employees on or before November 2, 2004 for the 2005 plan year and by every November 2 thereafter.

Note: These notices must be supplied by the employer each year to all eligible employees, regardless of whether there are any changes to the Plan. Changes to the plan (for example, the matching formula) may not be made for any year unless the notice is given in a timely fashion.