Client had a SIMPLE IRA plan to which they were making contributions through 12/31/00. They decided to implement a safe harbor 401(k) plan effective 1/1/02, and went through the necessary procedures to establish this qualified plan and no additional contributions were made after 12/31/00 to the SIMPLE IRA plan.

Client wants to know if they may transfer the account balances in their SIMPLE IRA plan directly into their safe harbor plan. We do not deal much with SIMPLE's, and I would appreciate any guidance on this issue.

Thanks!

Yes.. given that the two year requirement has been met( i.e. the SIMPLE IRA has been in existence for at least two years, beginning with the first day the employer deposits a contribution.) the SIMPLE IRA assets may now be ROLLED to the QP /EGTRRA 408(d)(3)(G)(ii)