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SIMPLE plan may be established by many different types of small business entities that employ up to 100 employees with compensation of $5000 or more and is available to:

  • self-proprietors, partnerships,
  • S and C corporations,
  • non-profit and tax-exempt organizations who do not offer any other retirement plans at the same time.

Both employer and employees contribute to the SIMPLE IRA. As part of the plan, employees will be offered an opportunity to have part of their pre-tax compensation deferred into their SIMPLE IRA.

Maximum SIMPLE elective deferral:

  • $15,500 for tax year 2023 ($3,000 more if attained age 50 or older)
  • $16,000 for tax year 2024 ($3,500 more if attained age 50 or older)

For each year of the plan operation, the employer will provide a matching contribution to all eligible employees.

It is required that the SIMPLE plan is offered to all eligible employees, and the employer must make contributions for each year the plan is in operation. Employer must also ensure a prompt contribution of deferred compensation into the employee’s SIMPLE IRAs and that employees are timely notified of their deferral options.


Main Benefits from the Perspective of the Employer:

  • plan is tax deduction on contributions
  • lack of responsibility for the funds once they are deposited into an employee’s SIMPLE IRA.
  • tax credit for costs incurred in connection with SIMPLE plan establishment.


Main Benefits from the Perspective of the Employee:

  • opportunity to reduce their current tax liability,
  • deposited funds are 100% vested,
  • employee has full control over the funds contributed to their SIMPLE IRAs.
  • Generally, all Traditional IRA distribution rules apply to SIMPLE IRA distributions with the exception for the increased 25% penalty on distributions made within the first two years from the date of first contribution made to the SIMPLE IRA.

All employers interested in establishing a SIMPLE plan should contact their tax advisor for more information about possible benefits and detailed eligibility requirements.



Please follow the link below to see our current IRA rates.

Current IRA Rates


How to Open

To open an IRA account, please visit one of our branch locations, or contact our Member Services Center at 1.855.PSFCU.4U.

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