BenefitsLink Message Boards > terminate Simple IRA, start Safe Harbor 401(k) non calendar year...possible?

Full Version: terminate Simple IRA, start Safe Harbor 401(k) non calendar year...possible?

BenefitsLink Message Boards > Retirement Plans > SEP, SARSEP and SIMPLE Plans

betheeg

Aug 11 2005, 08:52 AM

Client has Simple Ira in place now. They have made contributions during 2005. The company's fiscal year ends 8/31. Can they teminate the Simple now and start a Safe Harbor 401(k) for October 1st? Or do they have to wait until 1/1/06?

Thanks for any help...

Archimage

Aug 11 2005, 11:14 AM

I believe a plan year cannot be terminated mid-year for a SIMPLE IRA. I think you are stuck and will have to start the new 401(k) on 1-1-06.

Gary Lesser

Sep 7 2005, 08:32 PM

If the qualified plan is adopted for the same calendar year (benefits accrue etc) the SIMPLE-IRA would be invalidated for the year. See other posts if this road taken.

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