Who can establish a SIMPLE IRA plan Generally available to small employers without another qualified retirement plan for the same year Can be used by for-profit businesses and certain tax-exempt organizations Typically implemented using either: SIMPLE IRA plan with an IRS model form (Form 5304-SIMPLE or Form 5305-SIMPLE), or An IRS-approved prototype document from a financial institution or plan provider Employee eligibility rules (who must be allowed to participate) A SIMPLE IRA plan must generally allow participation for employees who, during any 2 prior years, received at least a minimum amount of compensation set by the IRS, and who are expected to receive at least that amount in the current year. The employer may choose less restrictive eligibility rules but not more restrictive than the federal standard. Age and service requirements are minimal; eligibility is primarily compensation-based. Employees who are commonly excluded Employees under a collective bargaining agreement may be excluded if retirement benefits were negotiated. Nonresident alien employees without U.S.-source income from the employer may be excluded, as well as those not meeting the plan’s eligibility conditions. Participation timing and enrollment Eligible employees must be given the chance to make salary reduction elections annually. Employers must provide notices explaining: The employee’s right to make or change elections, the employer contribution method, and key plan details. Salary reduction elections are generally annual but can be changed during allowed election periods. Employer contribution requirement (participation-related rule) Employers with a SIMPLE IRA plan must make an annual contribution for eligible employees using one of the approved methods. The selected method must be applied consistently with the SIMPLE IRA rules. Account setup and ownership (what participation means) Each employee has an individual SIMPLE IRA account in their name, owned and controlled by them. The employer\’s role is to facilitate the plan, provide notices, and deposit contributions timely. Employee election decisions (how participation works) Participation is elective: eligible employees may choose to contribute via salary reduction or not. Employer contributions may still apply depending on the employer’s contribution method and employee eligibility. New hires and newly eligible employees Must receive required notices and the opportunity to participate as soon as feasible. Eligibility rules should be applied consistently and documented. One-plan rule interaction Employers sponsoring a SIMPLE IRA cannot maintain another qualified plan for the same year, with related employers potentially treated as one. Practical compliance notes Eligibility depends on how the employer applies the SIMPLE IRA rules. Employees should confirm eligibility, enrollment deadlines, account establishment, investment options, and the employer’s contribution method.