My client has had a SIMPLE of 10 years. His employee left in 2012. It has now become clear he will never have an employee again. How does he go about terminating the SIMPLE so that he can start contributing to a SEP in 2015?
-
-
If the SIMPLE plan was in effect on 1/1/15, then the employer will have to wait until November 2, 2015 to terminate the plan effective December 31, 2015. The SEP plan can be adopted for the 2016 calendar year.
When the employer gave notice on 11/2/14 that the plan was available for 2015, the plan can not be terminated for the 2015 plan year.
As for the termination procedures, he will need to give written notice to himself on November 2, 2015 that the plan has been terminated as well as written notice to the plan custodian (generally the mutual fund company).
Comment