Morgan Stanley
  • Wealth Management
  • Mar 17, 2017

A SIMPLE Solution for Your Company Retirement Plan

Learn more about the tax-advantaged SIMPLE retirement program for you and your eligible employees.

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If you’ve considered adopting a retirement plan for your company but have been discouraged by the high cost, administrative burden and general time commitment associated with other retirement plan products, the Savings Incentive Match Plan for Employees (“SIMPLE Plan”) may be the solution you’ve been looking for.

Most employers, whether self-employed, owners of unincorporated businesses, partnerships, S corporations, nonprofit organizations or state and local governments and agencies, can establish a SIMPLE Plan.

To be eligible, an employer must have 100 or fewer employees whose compensation was $5,000 or more during the preceding year, and must not maintain another tax-qualified retirement plan (subject to certain limited exceptions).

Selecting the right IRA to receive SIMPLE Plan contributions is an important decision for you and your employees.

Simplified Tax Savings

The SIMPLE Plan can be an effective tax planning tool for employers and employees. When properly established, SIMPLE Plan contributions of up to 100% of compensation, but not in excess of $12,500 for 2017,* can be contributed on a salary reduction basis by each eligible employee. These pretax contributions, plus the required employer contributions discussed below, can provide a substantial tax-dollar savings.

Furthermore, SIMPLE Plan contributions can grow tax-deferred until withdrawn by plan participants. The combination of pretax funding and tax-deferred potential earnings may help accelerate the growth of the account, producing a potentially larger pool of capital for retirement.

Selecting the right IRA to receive SIMPLE Plan contributions is an important decision for you and your employees. You will need to consider the investment options available, the ability to change investments as needed, the competitiveness of the administrative fees and the ease of making SIMPLE Plan contributions. 

By adopting the Morgan Stanley SIMPLE Plan, you can:

  • Allow employees to direct the investments of their own SIMPLE IRA. With the Morgan Stanley SIMPLE Plan, each individual can decide on investments such as stocks, bonds, certain mutual funds, certificates of deposit, and certain annuities1. Each individual decides what investments to make, how much to invest and when to buy or sell investments. This opportunity to alter investment strategies and diversify2 a portfolio can help increase each individual’s potential growth opportunities.
  • Benefit from competitive pricing and ease of administration. At Morgan Stanley, each SIMPLE IRA will be charged an annual administration fee. Each terminated account is also subject to a termination fee. However, termination fees are not charged if the account is distributed in a year that the participant is age 75 or older, or following the participant’s disability or death. A transfer fee will be imposed for accounts transferred from Morgan Stanley to another financial institution. In the event that both fees apply, only the transfer fee will be assessed. Normal brokerage commissions will be charged for investment purchases and sales within the SIMPLE IRA account.
  • Save time and effort by sending only one contribution check to Morgan Stanley Smith Barney LLC for all eligible employees’ SIMPLE IRA accounts and avoid making SIMPLE Plan contributions to several separate institutions.

If you’d like to learn more about a SIMPLE Plan and discuss if they make sense for your business, call your Morgan Stanley Financial Advisor and ask for a copy of the Morgan Stanley SIMPLE Plan Employer Agreement. It provides detailed information about SIMPLE Plans and gives you everything you need to start a tax-advantaged retirement program for you and your eligible employees. If you don't have a Morgan Stanley Financial Advisor, find one near you by using the locator below.

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