I've been under the impression that an employer can set up a SIMPLE IRA plan in the year immediately following the year a 401(k) plan is terminated. I can see where a SIMPLE 401(k) could be considered a violation of the 1 year rule, but I don't believe the SIMPLE IRA plan comes under the same restriction. Any opinions on this?

You are correct that a SIMPLE IRA is not considered a successor plan and will not cause any problems with the allowance of the distributions.

SIMPLE plan can not be established for any year in which benefits accrue for participants under another plan ( e.g., forfeitures).