Are there any “pre-approved” documents an employer may use to establish a SIMPLE IRA plan?
Yes. The Service has issued two model forms: Form 5305-SIMPLE (for use with a Designated Financial Institution (DFI)), which is a form that may be used by an employer establishing a SIMPLE IRA plan with a financial institution that is a DFI; and Form 5304-SIMPLE (not subject to the Designated Financial Institution rules), which is the model form that may be used by an employer to establish a SIMPLE IRA plan that does not use a DFI. Alternatively, an employer can use an approved “prototype” plan, offered by many banks and mutual funds. Prototype plans are plans that are sponsored by financial institutions or firms that specialize in retirement plans and that have been reviewed by the Service to ensure that the language in the documents meets the requirements for SIMPLE IRA plans. Periodically, employers must adopt amended documents, either prototype or model form, to reflect law changes. The financial institution where the SIMPLE IRAs are maintained usually takes care of amending the do
