PLANADVISER - July/August 2020 - 20
research / 2020 PLANADVISER Recordkeeper Services Survey
(Continued from page 18)
PROS: While SIMPLE IRAs have a
mandated employer
Small-Employer Plans
contribution,
plan sponsors do have some flexibility
in those contributions. They
can either match an employee's deferrals,
dollar for dollar, up to 3% of his
compensation or make a nonelective
contribution of 2% of his compensation,
up to $5,700 a year.
There is less administrative work
required to run a SIMPLE IRA plan than
for most 401(k)s, as there is no vesting
schedule or testing requirement.
CONS: While employees may defer
earnings to their SIMPLE IRA, the
IRS limits the amount at $13,500 per
year-$16,500 for account holders 50
and up. Employer contributions vest
immediately, which diminishes the
value of these plans as an employee
retention tool.
SIMPLE IRAs may not be the best
choice for an employer that means
to scale quickly. Once it has over
100 employees each earning $5,000
per year, it will need to transition to
another plan.
Another potential drawback of
these plans is, annually, the 60-day
notice requirement as to changes.
According to Boyles, " If [a sponsor
is] going to make changes, it really
has to do it by October. " This is to
give participants time to adjust their
deferral amount or make any other
such changes during the 60-day election
period that typically ends the year.
" Then you're stuck with those changes
until the following year, " he says. " With
a 401(k), you can modify the plan document
on the fly, so it's more flexible. "
Payroll-Deducted IRA
Rather than a full-fledged retirement
plan, a payroll-deducted IRA plan lets
employees make deferrals to an IRA
from their paycheck, Boyles says.
PROS: There is little to no cost
for employers to set up a payrolldeducted
IRA plan.
CONS: Payroll-deducted IRAs have
traditional IRA limits, so employees
may sock away only up to $6,000-
$7,000 for those 50 and over. There is
no option for employer contributions.
-Beth Braverman
SEP / SIMPLE Accounts, by Account Balance
l <$10,000
l $10,000 - $25,000
l >$25,000 - $50,000
l >$50,000 - $100,000
l >$100,000
9%
29%
SEP
7%
10%
11%
43%
17%
14%
36%
SIMPLE
24%
SEP / SIMPLE Plans, by Participant Count
l <5
l 5-25
l >25
40%
SEP
58%
SIMPLE
96%
2%
<1%
3%
702,374 total employer-sponsored retirement plans per DOL data.
Of those, 616,554 plans (87%) had less than 100 employees.
Total SEP / SIMPLE Assets ($mm), Plans and Accounts
Total SEP assets
$139,835
Total SEP plans
993,717
Total SEP accounts
1,081,738
Total SIMPLE assets
$72,084
Total SIMPLE plans
441,902
Total SIMPLE accounts
1,946,831
20 | planadviser.com July-August 2020
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PLANADVISER - July/August 2020
Table of Contents for the Digital Edition of PLANADVISER - July/August 2020
Investing Against COVID-19
2020 PLANADVISER Recordkeeper Services Survey
Three Who Lead the Way
Prospecting in Turbulent Times
Retirement Savings Optimization
DOL Gives Private-Equity Guidance
Investment Advice Revisited
PLANADVISER - July/August 2020 - C1
PLANADVISER - July/August 2020 - FC1
PLANADVISER - July/August 2020 - FC2
PLANADVISER - July/August 2020 - C2
PLANADVISER - July/August 2020 - 1
PLANADVISER - July/August 2020 - 2
PLANADVISER - July/August 2020 - 3
PLANADVISER - July/August 2020 - 4
PLANADVISER - July/August 2020 - 5
PLANADVISER - July/August 2020 - 6
PLANADVISER - July/August 2020 - 7
PLANADVISER - July/August 2020 - 8
PLANADVISER - July/August 2020 - 9
PLANADVISER - July/August 2020 - 10
PLANADVISER - July/August 2020 - 11
PLANADVISER - July/August 2020 - Investing Against COVID-19
PLANADVISER - July/August 2020 - 13
PLANADVISER - July/August 2020 - 14
PLANADVISER - July/August 2020 - 15
PLANADVISER - July/August 2020 - 2020 PLANADVISER Recordkeeper Services Survey
PLANADVISER - July/August 2020 - 17
PLANADVISER - July/August 2020 - 18
PLANADVISER - July/August 2020 - 19
PLANADVISER - July/August 2020 - 20
PLANADVISER - July/August 2020 - 21
PLANADVISER - July/August 2020 - 22
PLANADVISER - July/August 2020 - 23
PLANADVISER - July/August 2020 - 24
PLANADVISER - July/August 2020 - 25
PLANADVISER - July/August 2020 - 26
PLANADVISER - July/August 2020 - 27
PLANADVISER - July/August 2020 - Three Who Lead the Way
PLANADVISER - July/August 2020 - 29
PLANADVISER - July/August 2020 - 30
PLANADVISER - July/August 2020 - Prospecting in Turbulent Times
PLANADVISER - July/August 2020 - 32
PLANADVISER - July/August 2020 - 33
PLANADVISER - July/August 2020 - Retirement Savings Optimization
PLANADVISER - July/August 2020 - 35
PLANADVISER - July/August 2020 - 36
PLANADVISER - July/August 2020 - 37
PLANADVISER - July/August 2020 - DOL Gives Private-Equity Guidance
PLANADVISER - July/August 2020 - Investment Advice Revisited
PLANADVISER - July/August 2020 - 40
PLANADVISER - July/August 2020 - C3
PLANADVISER - July/August 2020 - C4
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