SIMPLE RETIREMENT ACCOUNTS (SIMPLE IRAS)
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The savings incentive match plan for employees (SIMPLE IRA) is sponsored by employers and is a replacement for salary reduction SEPs (SARSEPs). The employer may set up IRAs for individual employees. The employer makes annual contributions by:
matching up to 3% of pay for employees who contribute or
contributing 2% of pay for all employees whether they contribute or not.
Employee contributions are limited to the lesser of $10,000 in 2005/2006, or 100% of compensation. Employees age 50 or over may make additional catch-up contributions adjusted annually.
Eligibility requirements follow on the next screen.