SIGNUPABOUTBW_CONTENTSBW_+!DAILY_BRIEFINGSEARCHCONTACT_US


Return to main story


Return to Enterprise Table of Contents

'Simple' Retirement Plan Highlights

-- Plan requires no discrimination testing: Employees need not participate for business owner to defer up to $6,000 plus 3% match per year.

-- Company must have no more than 100 employees and cannot use any other retirement plan in the same year.

-- Employer has no fiduciary responsibility for employee investments.

-- Owner must either make mandatory match of 3% of compensation for participating employees or contribute 2% of compensation for all employees, whether they participate or not.

-- Plan can be a 401(k) or in IRA form. The IRA allows owners to reduce the match in two out of five years; the 401(k) does not. 401(k) owners would be allowed to borrow from the plans, which would cost more to administer than an IRA.

DATA: BUSINESS WEEK


Updated June 14, 1997 by bwwebmaster
Copyright 1996, Bloomberg L.P.
Terms of Use