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SIMPLE IRA Implementation Guide (24004)

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SIMPLE IRA Implementation Guide (24004) Ameriprise® SIMPLE IRA Plan Implementation Guide Ameriprise SIMPLE Plan Congratulations on your new retirement plan Your Ameriprise® SIMPLE IRA plan is a smart choice because it’s designed just for small businesses. This tax-advantaged retirement plan benefits you, your business and your employees in many ways: ­­Benefits­for­you­and­your­business. Benefits­for­your­employees. • Attract employees • Salary deferrals – You can compete for labor more effectively by – Employees have a convenient way to save for offering an attractive retirement program, the retirement through salary deferrals cornerstone of many benefit packages – Employees age 50 and over may make additional • Reduce taxes “catch-up” salary deferral contributions – You can reduce pre-tax profits by making deductible • Tax-deferred growth contributions to the plan – Employees can benefit from the advantages of • Low administrative costs potential earnings on tax-deferred savings while the – Unlike some other retirement plans, there is no assets remain in their SIMPLE IRA annual IRS Form 5500 reporting required • Investment control – There is no requirement to track vesting – Contributions are made directly to the participant’s • Your employees can contribute to their retirement SIMPLE IRA, giving your employees control over their savings through convenient payroll deductions own investment 24004 AF (10/20) Page 1 of 40 Ameriprise SIMPLE Plan­­ The Ameriprise Financial advantage For more than 120 years, Ameriprise Financial has The table on the opposite page provides more been helping clients just like you reach their long-term information on the use of each required form and financial goals. Count on your Ameriprise financial document. advisor to provide the high-quality service and support You’ll need to use some forms and documents in this necessary to meet your needs and those guidebook more than once. Therefore, we recommend of your employees. that you make copies of the enclosed paperwork rather • Your financial advisor will help you establish the plan than writing on the originals. Retain this booklet for use and communicate it to your employees following the with future participants. steps outlined in this implementation guide Your Ameriprise financial advisor can answer any of • ­­­­­­Your financial advisor can meet with your employees your questions about the SIMPLE IRA plan and the to discuss their financial planning goals and the wide procedures ­­for implementing and managing it. We look range of investment options available to help them forward to working with you and your employees! reach their dreams This­guidebook­contains­everything­you­need­to­set­ up,­operate­and­administer­your­SIMPLE­IRA­plan­from­ Ameriprise­Financial. • Checklist of steps for implementing and managing your plan • IRS-approved plan documents • Tools for communicating with your employees • Forms necessary to execute and operate your plan • Resources for further information 24004 AF (10/20) Page 2 of 40 Guide to SIMPLE plan forms and documents Form/ Form/Document­ Review­ Make­copies­for­ Keep­completed­ Give­completed­ Make­copies­ Page Document­ name document future­use­(do­not­ form­for­your­records copy­to­your­ and­distribute­ numbers letter write­on­original) financial­advisor to­employees A SIMPLE IRA Employer 7 Eligibility Form Keep original B Basic Plan Document 9–16 Keep original C IRS Department of 17 Treasury Letter Keep original D.1 Adoption Agreement 19–20 Instructions D Adoption Agreement 21–22 Keep original Recommended but not required E Employee Participation 23–24 Notice and Summary Keep original Description F.1 Employee 25 Announcement Keep original Letter (Matching Contributions) F.2 Employee 26 Announcement Keep original Letter (Nonelective Contributions) G Employee Salary 27–28 Reduction Agreement Keep a copy of each employee’s completed form H Employer Payroll 29–31 Remittance, Give original to Arrangement Setup or financial advisor Changes Form I Online Payroll ACH 33–34 Agreement Give original to financial advisor K Employee Frequently 35–36 Asked Questions L Employer Frequently 37–39 Asked Questions 24004 AF (10/20) Page 3 of 40 Ameriprise SIMPLE Plan­­ Implementation steps 1.­ Establish­your­plan 2.­ Employee­communication­and­enrollment There are three phases to implementing your Once you have established your plan, you can SIMPLE IRA plan, and Ameriprise Financial is there communicate it to your employees. Your Ameriprise to help you every step of the way. First, you need financial advisor can help you with this process. to establish the plan by completing a number of Communicate ­your­new­SIMPLE­IRA­plan­to­ forms, as described below. Then you’re ready to participating­employees communicate the plan to employees. Lastly, you will set up contribution procedures. • Distribute the Employee Participation Notice and Summary Description (E) to participating Complete ­the­SIMPLE­IRA­plan­Employer­ employees Eligibility­Form­(A) • This notification must include your plans • Review with your legal counsel and tax advisor for Matching or Nonelective Employer • After all parties approve, complete and sign Contributions the form • You must distribute this notification to all • Give a copy of the completed form to your eligible employees before the 60-day election Ameriprise financial advisor period begins. (Note: The 60-day election • Retain the original in your records period is the period of time wherein eligible employees must be given the opportunity to Review ­the­Basic­Plan­Document­(B)­and­IRS­ enter into a salary reduction agreement or to Department­of­Treasury­Letter­(C) modify a prior agreement. The 60-day period • The Plan is a legal instrument; have your legal must include the date an employee becomes counsel and tax advisor review it before you eligible to participate in the plan or the day adopt it before that date.) • After all parties approve, retain it in your records • Distribute the Employee Announcement Letter that announces the adoption of the plan and Review ­and­complete­the­Adoption­Agreement­(D) the contribution formula you have elected. • Use the Adoption­Agreement­Instructions Distribute Employee Announcement Letter (F.1) (D.1) to guide you in completing this form if you have elected Matching Contributions or • The Agreement is a legal instrument; have your Employee Announcement Letter (F.2) if you legal counsel and tax advisor review it before have elected Nonelective Contributions you complete it • Distribute the Employee Frequently Asked • After all parties approve, complete and sign Questions (K) the Agreement Conduct ­enrollment­meetings­with­your­ • It’s recommended that you provide a copy employees of the completed form to your Ameriprise • Schedule your Ameriprise financial advisor to financial advisor but not required speak at enrollment meetings and distribute • Retain the original in your records enrollment kits • Conduct enrollment meetings where your Complete ­the­Employee­Participation­Notice­ Ameriprise financial advisor will present and­Summary­Description­(E) the retirement plan and basic investment • Use this notice to select a contribution principles formula — either Matching Contributions or Nonelective Contributions • Invite employees to discuss their investment options with your Ameriprise financial advisor • Retain the original in your records and to establish their SIMPLE IRA account • Distribute it to your employees (see Step Two instructions) 24004 AF (10/20) Page 4 of 40 3.­ Contribute­to­the­plan Continuing­plan­administration The final phase in setting up the SIMPLE IRA is to Ongoing administration of your SIMPLE IRA plan involves establish procedures for making plan contributions. providing annual notice to employees and enrolling new Each participating employee will need to complete participants. an Employee­Salary­Reduction­Agreement­(G), Annual ­notice­to­employees which authorizes you to withhold an amount from Each year, an annual notice to employees must their paycheck. This form should be returned to you. be distributed no later than November 1 (at Establish ­an­ongoing­remittance­procedure least 60 days prior to the start of the upcoming Ameriprise Financial works with National Benefit plan year). This notice communicates to eligible Services (NBS), a third-party administrator (TPA), employees the employer contribution formula to provide payroll remittance services. you have elected for the upcoming year. • Complete the Employer­Payroll­Remittance, • Each year, complete the Employee­ Arrangement­Setup­or­Changes­Form­(H) and Participation­Notice­and­Summary­ the Online­Payroll­ACH­Agreement­(I) and give Description­(E) them to your financial advisor • Update plan information • NBS will send you an e-mail with additional • Distribute to employees no later than instructions. After you have gone through the November 1 setup process for online payroll processing, Enroll ­new­participants begin withholding salary deferrals from participants’ paychecks based on their As employees become eligible to participate in elections made on the Employee­Salary­ the plan, you will need to communicate to them Reduction­Agreement­(G) the opportunity to participate. • Upload your deposit instructions to the secure • Distribute the­Employee­Participation­Notice­ website and the corresponding payment will be and­Summary­Description­(E) 60 days prior to pulled from your bank account the date a new employee becomes eligible to participate in the plan • A Payroll Reduction Detail
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