Comparing SIMPLE IRA, SIMPLE IRA Plus^SM and SIMPLE 401(k) plans

Eligible employers

* All employers with no more than 100 employees. These employees must have earned at least $5,000 during the prior year.

*  Tax-exempt organizations

*  Government entities*

*  Some states have minimum requirements for government-sponsored plans. 

*   All employers with no more than 100 employees. These employees must have earned at least $5,000 during the prior year.

• Tax-exempt organizations
•  Government entities*

*  Some states have minimum requirements for government-sponsored plans. 

*  All employers with no more than 100 employees. These employees must have earned at least $5,000 during the prior year.

• Tax-exempt organizations

Share class availability

• Commission-based plans: Class A or C shares
• Fee-based plans: Class F-2 shares

• Commission-based models: Class R-3 shares
• Fee-based models: Class R-5E shares
• Levelized compensation

• All R shares available, depending on retirement plan solution selected
• Levelized compensation

Plan default investment option

Not available

Qualified default investment alternative (QDIA) is available

Qualified default investment alternative (QDIA) is available

Fees

$10 one-time setup fee and $10 annual maintenance fee per SSN

$25 one-time setup fee and $25 annual maintenance fee per SSN

Fees vary by recordkeeper. Contact the recordkeeper for a specific fee quote.

Eligible employees

Any employee earning $5,000 during any of the two prior years and expected to earn $5,000 in the current year is eligible

Can exclude employees covered under a collective bargaining agreement and nonresident aliens (NRAs)

Any employee earning $5,000 during any of the two prior years and expected to earn $5,000 in the current year is eligible

Can exclude employees covered under a collective bargaining agreement and nonresident aliens (NRAs)

• Following qualified plan guidelines, employees who have one year of service (1,000 hours during a 12-month period) are eligible
• Can exclude employees up to age 21
• Can exclude certain employees. For details regarding which employees may be excluded, visit SIMPLE IRA Plan FAQs on the IRS website.

Investments

All American Funds (except tax-exempt funds)

Customizable fund menus comprised of American Funds (except tax-exempt funds)

Customizable fund menus comprised of American Funds (except tax-exempt funds), including American Funds Target Date Retirement Series®

Can include fund options from outside investment managers

Service model

Financial professional provides individual advice on investment selection

Participants and financial professionals (at the participant's request) do the trading

The Financial professional serves the plan with access to plan-level reports and provide general education and enrollment guidance to participants

Participants do all the trading

Financial professional serves the plan and can provide general education and enrollment guidance to participants

Participants do all trading

Funding vehicle

IRAs

Qualified trusts treated like an IRA

Qualified trusts

Enrollment

Financial professional facilitates enrollment for each participant

Select online enrollment capabilities and simplified enrollment forms streamline the enrollment process

Online and automatic enrollment, depending on solution and plan document

Automatic enrollment

Not available

Optional feature

Optional feature

Loans

No

No

Yes

Employer control of distributions

No

No

Defined by qualified plan rules. All distributions need employer approval

Testing requirements

No testing required

No testing required

No top-heavy testing required

No ADP or ACP testing required

Section 415 maximum limits apply. For details, visit “2022 Limitations Adjusted as Provided in Section 415(d)”

Form 5500 filing requirement

No

No

Yes