SIMPLE IRA

1. Key things to know

2. Open your plan

1. Print, read, and retain copies of the following documents:
   
   
   • Fidelity SIMPLE IRA Plan Agreement (PDF)
   • Fidelity Funding Account Agreement (PDF)
2. In order to set up your plan, you will need to print, complete and sign the following documents:
   
   
   • Plan Adoption Agreement (PDF)
   • Company Profile Form (PDF)
   • Corporate Resolution Form (PDF) - This form is required if your business is incorporated.
3. Please mail the completed originals in Step 2 to:

   Fidelity Investments
   PO Box 770001
   Cincinnati, OH 45277-0038

4. Keep copies of all forms and documents for your company's plan records.
5. Once we have received the completed required documents in Step 2, you are ready to enroll your employees. Please see Enroll Employees for more information.

3. Enroll employees

1. If you intend to deliver plan-related materials to your employees via email, please consult the Department of Labor's guidance for the use of electronic delivery of required plan-related materials.
2. Download, print, customize, and distribute to all eligible employees:
   
   
   • Fidelity SIMPLE IRA Plan Summary Description (PDF)
   • Fidelity SIMPLE IRA Plan Participant Notice (PDF)

   You are required to provide eligible employees with the Sample Summary Description and Participant Notice on an annual basis (by November 2). Fidelity SIMPLE IRA Plans receive a Summary Description and Participant Notice when the plan is established and annually thereafter in September.

   You are legally required to give all eligible employees at least 60 days to make or modify any salary reductions elections each year.

3. Have every participating employee print and review the SIMPLE IRA Employee Enrollment Brochure (PDF)
4. Have every participating employee open a SIMPLE IRA account. For anyone choosing to open his or her account with Fidelity, visit Fidelity.com/simpleiraapplication.
   
   Note: Please make sure that the SIMPLE IRA plan for your company has been established before submitting the account application. Participants will need the tax identification number (TIN) for their employer.
5. Have every participating employee complete a Salary Reduction Agreement (PDF) and forward the completed agreement to your payroll vendor or payroll processor. The employer should keep a copy of the employee's elections on file for their records.

If you have any questions, call 800-544-5373 to speak with a Fidelity small business retirement plan associate.

4. Funding your plan

Once you have opened your SIMPLE IRA Plan and employee accounts have been established, the next step is to set up electronic funding for the plan. You have two options:

Option 1: Use Fidelity's Electronic Funding Service, which is available through our Plan Manager site:

Print and review the Using Plan Manager (PDF) guide, then go to Plan Manager to register so that you can make contributions to your plan. For more information on Fidelity Plan Manager, please visit the FAQs

Option 2: Use your external bank or payroll vendor to fund your plan electronically:

Print, review, and provide your bank or payroll vendor with a copy of the Important Information about Your Fidelity SIMPLE IRA Plan (PDF).

Maintaining your SIMPLE IRA plan

The Savings Incentive Match Plan for Employees (SIMPLE) IRA is suited for both self-employed individuals with no other employees and small business owners with 100 or fewer employees. It's a "simple" plan to operate, but you should be aware that there are some ongoing administrative responsibilities if your plan is active. The list below doesn't necessarily cover all of your responsibilities. You may want to consult the IRS or a qualified tax advisor if you have additional questions.

Employer responsibilities

1. Establish your plan

a. Establish your plan and notify eligible employees by October 1 of the year you intend to begin your plan.
See: Open Your Plan

b. Complete the company profile form to provide us with information about your company.

• Choose the authorized individual(s) on the company profile form. It's a good idea to name the business owner as the primary authorized individual for the plan. because that's the person who will have the ability to add and remove authorized individuals.
• Set up your company bank for Plan Manager. Even if you don't intend to use Plan Manager, it 's a good idea to set up a company bank link in the event there's an issue with your outside funding mechanism.

2. Notify eligible employees

• Provide the Summary Description, Participant Notice, Salary Reduction Agreement and, for new participants, a SIMPLE Application (available online) to eligible employees. See: Enroll Employees
• Provide the notification for the first plan year and for every subsequent plan year. Employees must be given 60 days to make their elections.
  • The annual 60-day election period allows employees to enter into or modify their salary reduction agreements. The election period starts when the employer satisfies the plan notification requirements.
  • For the first plan year, the election period can be any 60-day period which includes the plan effective date.
  • The election must start by the plan effective date.
  • Employers may notify employees earlier, but the election period cannot end before the effective date.
  • For subsequent plan years, the election period is the 60-day period immediately preceding January 1 of the calendar plan year. Employers must provide the notification by November 2 prior to the plan year.

3. Keep records

It's important to keep your original adoption agreement and any subsequent adoption agreements you fill out for the life of your plan, and possibly for years after termination. You should retain the Salary Reduction Agreements your employees return to you, and records of any contributions made to the plan on their behalf, as well as other documents related to your plan.

4. Contribute to participant accounts

• There are two options to fund the accounts in your SIMPLE IRA Plan: Plan Manger or by using an external bank or payroll vendor. See: Funding Your Plan
• Company contributions can be made up to your business tax filing dead line, plus extensions. Salary deferral contributions need to be made as soon as possible, but no later than 30 days after the end of the month in which they were deferred. See the IRS rules for more information.

5. Notify employees eligible to participate annually

• You must decide before November 2 of the current year whether or not you wish to continue the plan for the upcoming year, and if you want to make changes to what you offer.
• Be aware that if your plan provides a matching contribution, you must match dollar for dollar up to 3% of compensation for at least three years out of a five year period.
• By November 2 you need to notify your employees if there will or will not be a plan for the upcoming year. If the plan is continuing the employees must also be informed of what the terms are by distributing a new Summary Description and Participant notice. These must be completed and distributed by November 2 to give your employees 60 days for their elections before January 1.

6. Abide by the terms defined in the plan agreement

• Fidelity SIMPLE IRA Plan Agreement

7. Correct errors of operation

• Despite your best efforts, there may be errors of operation that arise in running your plan. Most errors occur around contributions. A good practice is to double check the following before submitting a contribution: Is it going to the right person? Is it marked for the correct year? Is it the right type of contribution (company vs. salary deferral)? Did you already process this contribution, and would this result in a duplicate? Some minor errors may be fixable within the plan. Please call a Retirement Representative to see if we can help 1-800-544-5373 (say "Small Business Retirement Plan" when prompted.) In some cases, the error may result in an excess contribution.
• Excess contributions: There is no formal IRS method to correct SIMPLE IRA excesses. You should consult your tax advisor for guidance if you determine you have an excess that must be removed, prior to completing the SIMPLE IRA RETURN OF EXCESS FORM. Additional information may also be found in the IRS SIMPLE IRA FIX-IT GUIDE.

NOTE: Fidelity cannot withdraw funds from a client's account without their permission. Both the plan's Authorized Individual and the account owner must sign off on a request for a return of excess.

8. Terminate your plan when appropriate

• If you are discontinuing your SIMPLE IRA Plan. you should notify your employees prior to November 2 of the current year that there will not be a plan effective the following January 1.
  NOTE: You cannot terminate your plan in the middle of a calendar year. Once you have notified your employees of this benefit you must continue with the funding promised to your employees.
• Notify Fidelity in writing only after you have made all final contributions by sending a letter of instructions signed by the Authorized Individual to:
  Fidelity Investments
  P.O. Box 770001
  Cincinnati, Oh 45277 - 0037
• In the future, should you want to restart your plan you must notify eligible employees by November 2 of the year prior to the start of your plan on the following January 1. You cannot start a plan mid-year after your initial year.

Fidelity's responsibility

1. Provide and maintain the Plan Agreement

NOTE: Fidelity does not use the IRS Model documents 5304 or 5305 - SIMPLE

2. Maintain accounts

Fidelity will provide individual brokerage SIMPLE IRA accounts on our platform for each eligible employee and the Fidelity SIMPLE IRA Customer Agreement and Important Disclosures that outlines the rules and agreement for the account, and will be provided to your employee upon account opening.

3. Prepare tax forms for employees

• IRS tax form 5498 each year there is activity in the account (including contributions).
• IRS tax form 1099-R for each year distributions or rollovers are processed out of an account.

4. Offer planning and investment guidance to your eligible employees who set up their SIMPLE IRAs at Fidelity

1. They can choose investments using our exceptional online tools and data as well as through our experienced Representatives.
2. For more information on how we can help you with investment management, planning and advice, please see What We Offer.

5. Provide and maintain a platform for Plan Administration

Our Plan Manager website is available to Authorized Individuals to contribute to your plan and perform plan maintenance.

6. Statements

Provide monthly plan statements for months that there are any contributions to the plan.

Helpful resources:

1. IRS Plan Checkup List
2. Retirement Plans for Small Business
3. Employee Plans Compliance Resolution System (EPCRS)
4. SIMPLE IRA FIX-IT GUIDE
5. IRS SIMPLE IRA PAGE
6. Remove Terminated Participant Form
7. Plan Maintenance Form
8. SIMPLE IRA RETURN OF EXCESS FORM