Question

Basic provisions of SIMPLE IRAs include which of the following?

A) They are subject to actual deferral percentage test (ADP) nondiscrimination rules.
B) Employees are 100% vested in their elective deferrals.
C) Employees are not fully vested in employer contributions until completing five years of service.
D) Employers with fewer than 100 employees who earned $5,000 during any two preceding years and are reasonably expected to earn at least $5,000 during the current year must be allowed to participate.

Answer 1

The basic provisions of SIMPLE IRAs include employees being 100% vested in their elective deferrals and employers with fewer than 100 employees being allowed to participate.

Step-by-step explanation:

Basic provisions of SIMPLE IRAs include the following:

1. They are subject to actual deferral percentage test (ADP) nondiscrimination rules.
2. Employees are 100% vested in their elective deferrals.
3. Employees are not fully vested in employer contributions until completing five years of service.
4. Employers with fewer than 100 employees who earned $5,000 during any two preceding years and are reasonably expected to earn at least $5,000 during the current year must be allowed to participate.