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Small-Business Retirement FAQs: SIMPLE IRA

  • What are the eligibility requirements for opening a SIMPLE IRA plan? Which employers can establish a SIMPLE IRA plan?

    Generally, SIMPLE IRA plans can be established by any business with 100 or fewer employees who earned $5,000 or more in the preceding year, and which does not currently maintain any other retirement plan.

  • How do I open a SIMPLE IRA plan for my business? What about opening participant accounts?

    Easy-to-follow instructions can be found online—see the SIMPLE IRA: Getting started.

    Fidelity will mail employee enrollment kits to you upon receipt of the plan documents. Additional enrollment kits may be ordered from a Fidelity retirement representative by calling 800-544-5373 (choose option 3).

  • When must my employees be notified of their eligibility to participate in the plan?

    You are required to provide eligible employees with a Sample Summary Description and Participant Notice on an annual basis (by November 1). Fidelity SIMPLE IRA plans receive a Summary Description and Participant Notice when the plan is established and annually thereafter in September.

    To open a SIMPLE IRA plan for the current year, the plan must be established and employees notified by October 1; please note that an exception applies for businesses established after October 1.

  • How is the salary deferral process managed and who gets the paperwork?

    Your employees complete the Salary Reduction Agreement Form and return it to you or your payroll office (it does not go to Fidelity). A sample salary reduction agreement form is available online and is included in the Fidelity SIMPLE IRA employee enrollment kit. You may use this form or create your own customized version.

  • What mutual funds are eligible for investment in a SIMPLE IRA?

    Your SIMPLE IRA account may buy or exchange any fund as long as the minimum initial and subsequent investment limits are met. To be eligible for ongoing SIMPLE IRA salary deferrals or employer contributions, however, a fund must waive the investment minimums for SIMPLE IRA customers. See a list of eligible funds, including no-load and no-transaction-fee funds from Fidelity and other well-known fund companies.

    Before investing, consider the funds’ investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

  • How do I get a copy of my Adoption Agreement, Summary Description, or a Plan Level Report?

    For copies of your Plan Adoption Agreement or additional Summary Descriptions, please call a retirement representative at 800-544-5373 (choose option 3). The Summary Description is mailed to plans annually in September. Plan Level Reports are sent on a monthly basis to every SIMPLE IRA plan. The report includes a total of all salary deferral and employer contributions made for the period, is broken out by participants, and includes a participant level breakout of contributions.

  • My business is growing. Am I still eligible for a SIMPLE IRA plan?

    Generally speaking, you are eligible for a SIMPLE IRA as long as your business has fewer than 100 employees earning $5,000 or more in the preceding year. As you grow, other retirement plans may become more appropriate. Please contact a Fidelity retirement representative at 800-544-5373 (choose option 3) for more information.

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