In a SIMPLE Plan, the "SIMPLE" stands for Savings Incentive Match Plan for
Employees of Small Employers.
A SIMPLE plan is a plan in which a small business with one hundred or fewer employees can offer retirement benefits through employee salary reductions and matching contributions, similar to those found in a 401k plan.
The SIMPLE Plan can be either a SIMPLE IRA or a SIMPLE 401k. SIMPLE IRA plans impose few administrative burdens on employers because IRAs are owned by the employees and the bank or financial institution receiving the funds does most of the paperwork. While each has some different features, including contribution limits and the availability of loans, required employer contributions are immediately 100 percent vested in both.
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