It is my understanding that employees meeting the eligibility requirements in SIMPLE-IRA plan do not actually enter the Plan until January 1 (assuming IRS 5304-SIMPLE document). For example, if eligiblity requirements are $5,000 in a prior year, Employee hired 12/01/01 earns $1,000 during 2001, from 01/01/02 thru 05/31/02 earns $5,000. Employee would enter 01/01/03, not any earlier. Is this a correct understanding?

Only possible mid-year entries I see (again assuming IRS 5304-SIMPLE) are rehires, union to nonunion or if there are no eligibility requirements new hires could pick up deferrals as provided in the document. Am I missing anything?

Thanks in advance for any guidance.

Agreed. Assuming $5,000 is required in only _one_ prior year (up to 2 could be selected) and reasonable expected to earn $5,000 (as stated in document) for current year, they would enter on 1/1/03.