SIMPLE 401(k) Plan

Definition

A retirement plan sponsored by employers which is attractive for employers because it avoids some of the administrative fees and paperwork of plans such as a 401(k) plan. Employers benefit from the tax-deductible contributions made to the plan, and employees may elect to have salary deferrals in order to contribute to the plan. The employer has the option of matching a certain portion of the employee's deferrals or making non-elective contributions to all eligible employees (an annual limit applies in both cases). A minimum compensation eligibility requirement exists for employees who want to join this plan, and employees cannot establish any other qualified retirement plans at the same time.

Use SIMPLE 401(k) Plan in a sentence

You may want to try and get a simple 401 plan if you think that will be enough for you in the future.

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The simple 401 plan was a really interesting plan and I thought it was a good idea for us to implement for us.

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My company decided to end its previous 401(k) plan because it saw there would be lower administrative fees and paperwork with a SIMPLE 401 plan instead.

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SIMPLE simple interest