Compare SIMPLE IRA, SIMPLE IRA Plus and SIMPLE 401(k) plans

Eligible employers

• All employers with no more than 100 employees. These employees must have earned at least $5,000 during the prior year.
• Tax-exempt organizations
• Government entities*
   

* Some states have minimum requirements for government-sponsored plans. 

• All employers with no more than 100 employees. These employees must have earned at least $5,000 during the prior year.
• Tax-exempt organizations
• Government entities*
   

* Some states have minimum requirements for government-sponsored plans. 

• All employers with no more than 100 employees. These employees must have earned at least $5,000 during the prior year.
• Tax-exempt organizations

Share class availability

• Commission-based plans: Class A or Class C shares
• Fee-based plans: Class F-2 shares

• Commission-based models: Class R-3 shares
• Fee-based models: Class R-5E shares
• Levelized compensation

• All Class R shares available, depending on retirement plan solution selected
• Levelized compensation

Plan default investment option

Not available

Qualified default investment alternative (QDIA) is available

QDIA is available

Fees

$10 one-time setup fee and $10 annual maintenance fee per Social Security number (SSN)

$25 one-time setup fee and $25 annual maintenance fee per SSN

Fees vary by recordkeeper. Contact the recordkeeper for a specific fee quote.

Eligible employees

Any employee who earned $5,000 during any of the 2 prior years and who is expected to earn $5,000 in the current year is eligible

Can exclude employees covered under a collective bargaining agreement and nonresident aliens (NRAs)

Any employee who earned $5,000 during any of the 2 prior years and who is expected to earn $5,000 in the current year is eligible
 

Can exclude employees covered under a collective bargaining agreement and NRAs

Following qualified plan guidelines, employees who have one year of service (1,000 hours during a 12-month period) are eligible

Can exclude employees up to age 21

Can exclude certain employees

Investments

All American Funds (except tax-exempt funds), including American Funds Target Date Retirement Series®

Customizable fund menus comprised of American Funds (except tax-exempt funds), including American Funds Target Date Retirement Series

Customizable fund menus comprised of American Funds (except tax-exempt funds), including American Funds Target Date Retirement Series

Can include fund options from outside investment managers

Maximum annual salary deferrals

Employers with 25 or fewer employees (and employers with 26-100 employees who elect higher contribution amounts¹)

• In 2024, $17,600; a catch-up contribution may be added of $3,850 if age 50 or older. Or 100% of compensation, whichever is less
• In 2025, $17,600; a catch-up contribution may be added of $3,850 if age 50-59, $5,250 if age 60-63² and $3,850 if age 64 and over. Or 100% of compensation, whichever is less

Employers with 26-100 employees¹

• In 2024, $16,000; a catch-up contribution may be added of $3,500 if age 50 or older. Or 100% of compensation, whichever is less
• In 2025, $16,500; a catch-up contribution may be added of $3,500 if age 50-59, $5,250 if age 60-63² and $3,500 if age 64 or older. Or 100% of compensation, whichever is less

¹ Employers with 26–100 employees who earned at least $5,000 in the prior year can qualify for the increased participant contribution limit by providing higher mandatory employer contributions of either a dollar-for-dollar match up to 4% of compensation or 3% nonelective contributions.

² Effective January 1, 2025, the SECURE 2.0 Act allows higher catch-up salary deferral contributions for employees age 60-63.

SIMPLE IRA Plus limits are the same as SIMPLE IRA limits

SIMPLE 401(k) limits are the same as SIMPLE IRA limits

Required employer contributions

Must be one of the following:

• Dollar-for-dollar matches up to 3%* of compensation
  • No maximum compensation limit, not to exceed salary deferral contribution amount
  • 415 limit doesn't apply
• 2%* nonelective contribution to all eligible employees who earned at least $5,000 during the year
  • $350,000 compensation limit for 2025 does apply
• Reduced dollar-for-dollar match below 3% of compensation but not less than 1% of compensation
  • The compensation limit doesn't apply
  • This election is allowed for only 2 years out of a 5-year period 
  • 415 limit doesn't apply

Optional employer contribution:

A nonelective contribution may be made to each eligible employee, in addition to mandatory employer contributions, in a uniform percentage up to 10% of compensation but not to exceed $5,000

* An employer with 26 to 100 employees who earned at least $5,000 in the prior year has the option to offer higher deferral limits if they decide to increase the matching contribution to 4% or the nonelective contribution to 3%.

SIMPLE IRA Plus options are the same as SIMPLE IRA options

Must be one of the following:

• Dollar-for-dollar matches up to 3%* of compensation
  • No maximum compensation limit, not to exceed salary deferral contribution amount
  • 415 limit doesn't apply
• 2%* nonelective contribution to all eligible employees who earned at least $5,000 during the year
  • $350,000 compensation limit for 2025 does apply

Optional employer contribution:

A nonelective contribution may be made to each eligible employee, in addition to mandatory employer contributions, in a uniform percentage up to 10% of compensation but not to exceed $5,000

* An employer with 26 to 100 employees who earned at least $5,000 in the prior year has the option to offer higher deferral limits if they decide to increase the matching contribution to 4% or the nonelective contribution to 3%.

Discretionary employer contributions 

Employers have the option of making an additional nonelective contribution above the currently required employer contribution (nonelective or matching). The employer contribution is made to each eligible employee in a uniform manner, up to the lesser of $5,000 (as indexed) or 10% of compensation.

Employers have the option of making an additional nonelective contribution above the currently required employer contribution (nonelective or matching). The employer contribution is made to each eligible employee in a uniform manner, up to the lesser of $5,000 (as indexed) or 10% of compensation.

Employers have the option of making an additional nonelective contribution above the currently required employer contribution (nonelective or matching). The employer contribution is made to each eligible employee in a uniform manner, up to the lesser of $5,000 (as indexed) or 10% of compensation.

Roth contributions

Salary deferral Roth contributions are allowed 

Salary deferral Roth contributions are allowed

Salary deferral Roth contributions are allowed

Service model

Financial professional provides individual advice on investment selection

Participants and financial professionals (at the participants’ request) do the trading

Financial professional serves the plan with access to plan-level reports and can provide general education and enrollment guidance to participants

Participants do all trading

Financial professional serves the plan and can provide general education and enrollment guidance to participants

Participants do all trading

Enrollment

Financial professional facilitates enrollment for each participant

Select online enrollment capabilities and simplified enrollment forms streamline the enrollment process

Online and automatic enrollment may be available, depending on solution and plan document

Automatic enrollment

Not available

Optional feature

Optional feature

Loans

No

No

Yes

Employer control of distributions

No

No

Defined by qualified plan rules. All distributions need employer approval.

Testing requirements

No testing required

No testing required

No top-heavy testing required

No ADP or ACP testing required

Section 415 maximum limits apply

Form 5500 filing requirement

No

No

Yes