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'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
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Updated June 14, 1997 by bwwebmaster
Copyright 1996, by The McGraw-Hill Companies Inc. All rights reserved.
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