Your employer will give you the proper forms to fill out and materials to explain the details of the SIMPLE IRA plan the company has chosen. If you decide to participate, just fill out the forms and return them to your employer.
You do. Your employer may direct SIMPLE contributions to your T. Rowe Price SIMPLE IRA account, but these contributions become your property when they are deposited in your SIMPLE IRA. The contributions are immediately 100% vested. The money must stay in a SIMPLE IRA account for two years from your initial SIMPLE IRA participation date or a 25% penalty may be assessed upon withdrawal. After two years, the normal IRA distribution rules apply (i.e., if you withdraw before you reach age 59½, you may incur a 10% penalty).
Your employer may enroll everyone in a SIMPLE IRA and make contributions into a SIMPLE IRA on your behalf. Employees are under no obligation to contribute if they do not want to do so.
Yes. If you work for more than one employer, you may also participate in another retirement plan in addition to the T. Rowe Price SIMPLE IRA, but certain contribution limits among the plans may be applicable.
No. SIMPLE IRA contributions may be deposited only in the employee's SIMPLE IRA account.
There is a $20 account service fee for each T. Rowe Price mutual fund account with a balance below $10,000 in your SIMPLE IRA. The $20 account service fee will be waived for the following circumstances: Subscribe to electronic delivery of statements and confirmations*; maintain an individual combined balance of $50,000 or more for all T. Rowe Price accounts (including mutual funds, Brokerage, Variable Annuity, and Small Business Retirement Plans); or qualify for T. Rowe Price Select Client Services based on higher asset levels of $100,000 or more. If the Participant Account is closed during the year, a $20 closeout fee will be deducted automatically from the proceeds of the total redemption. However, the closeout fee is waived when an account service fee was previously assessed to the participant for that year or when the proceeds are being used for a rollover, transfer or conversion to a T. Rowe Price retirement plan account or T. Rowe Price IRA account.
Generally, any employee who has earned at least $5,000 during any two prior years and who is expected to earn $5,000 in the current year must be eligible to participate in a SIMPLE IRA plan. However, your employer may choose to exclude certain union employees and nonresident aliens, or the employer may impose less stringent requirements. Refer to information from your employer, such as your copy of the SIMPLE IRA plan document, for the rules specific to your plan.
Up to $12,500 for 2016. This amount will be adjusted to reflect any cost-of-living increases announced by the IRS. In addition, individuals age 50 or older may contribute up to an additional $3,000 in 2016.
Yes, your employer must make either matching or nonelective contributions each year. Your employer must notify you of the contribution type and the contribution percentage prior to your initial eligibility and at the beginning of each annual 60-day election period (the 60 days during which you may enter into or modify your salary reduction agreement for the following year).
Your employer may match 100% of your salary deferrals, up to the first 3% of your compensation.
An employer may also elect to match a lower percentage, as long as it is not lower than 1% of your compensation. This option is only allowed in two years of any five consecutive years. Those employers who match below 3% must notify their employees of the lower matching percentage prior to the 60-day election period beginning before the plan year in which the match will be below 3%.
Up to 2% of compensation. No more than $265,000 in compensation for 2016 can be taken into account when determining the non-elective contribution for each employee.
No. Your T. Rowe Price SIMPLE IRA account may include only your employer's contributions and your own deferrals. However, rollover contributions and transfers from your other SIMPLE IRA accounts may be placed in this SIMPLE IRA. Two years after establishing a SIMPLE IRA, you may roll over a SIMPLE IRA account to a Traditional IRA account without incurring a penalty.
Your employer must remit your salary reduction contributions to the SIMPLE IRA no later than the end of the 30-day period after the end of the month in which you normally would have received that money in your paycheck. Employer contributions to your SIMPLE IRA may be made in periodic contributions or in a single lump sum, as long as the contributions are deposited before the employer's tax return filing deadline (including extensions).
Yes. You are permitted to stop contributing at any time by properly notifying your employer. Your plan may require that you wait until the beginning of the next calendar year to resume contributions. Refer to information from your employer, such as your copy of the SIMPLE IRA plan document, for the rules specific to your plan.
You choose how you want to invest SIMPLE IRA plan contributions made by your employer. In a T. Rowe Price SIMPLE IRA, you can select from over 90 different stock, bond, and money market mutual fund investment options. Additional information on any T. Rowe Price mutual fund may be obtained from downloading the fund prospectus.
To withdraw assets, contact T. Rowe Price at 1-800-492-7670 or at P.O. Box 17479, Baltimore, MD 21297-1479. Please note that if you have not yet reached age 59½ and no exception applies, you may be subject to a 10% penalty. This penalty may be increased to 25% if you withdraw money from your SIMPLE IRA during the first two years of your participation in the plan.
No. The IRS does not allow loans from a SIMPLE IRA.
Your right to transfer amounts out of your account is discussed in the summary description materials provided by your employer.
No. Your employer is responsible for adjusting your Form W-2 to reflect your salary reduction contributions to the plan.
No. Your salary deferral contributions are considered pretax contributions and are not included in your gross income. Neither employer nor salary deferral contributions are taxable until withdrawn from the plan.
Your employer must provide the following information in writing to all eligible employees, prior to each employee's initial eligibility date and prior to the 60-day election period preceding the beginning of each calendar year:
- Notification of the opportunity to initiate or change salary reduction elections.
- Notification of the type of employer contributions that will be made (i.e., 1% to 3% matching contribution or a 2% nonelective contribution).
- A summary description of the SIMPLE IRA plan.
T. Rowe Price will provide:
- A list of mutual funds available for investment;
- A prospectus for each fund selected;
- Distribution or withdrawal information;
- A quarterly statement showing your allocation choices and changes, the total amount you have contributed that quarter, your account balance, and other information; and
- Periodic fund information.