How to Suspend a Fidelity Simple IRA Plan
Several retirement plan options exist for the small business owner. The Fidelity Simple IRA is one of the easiest, cheapest and most popular choices for companies whose employees will most likely be making only minimal contributions. The Simple IRA has some regulations and restrictions that other plans do not, but it is also one of the easier types of group retirement plans to administer. If you feel that a suspension of your company's Fidelity Simple IRA contributions, or a complete termination of the plan, is in the best interests of the company and its employees, making those changes to your operation can be done quickly and efficiently with little effort.
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Instructions
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Decide when to suspend your Fidelity Simple IRA. According to the IRS, "An employer may terminate a Simple IRA plan prospectively, beginning with the next calendar year, after the employer has informed employees that there will be no Simple IRA plan for the upcoming year." Consider that IRS regulations require you to continue funding and maintaining the plan until the end of the year.
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Inform Fidelity of your decision. Contact a Fidelity Retirement Representative at 800-544-5373 and explain your situation. Discussing your intentions with one of Fidelity's experts will help you to avoid mistakes during the suspension process, and you will also have access to educational information from Fidelity.
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Inform your employees of your decision. It is necessary to notify your employees of your intent to suspend the Fidelity Simple IRA plan at the end of the year. By giving appropriate advanced notice, your workers will have enough time to make their own arrangements regarding the proper handling of their retirement savings. For these situations, Fidelity simplifies and streamlines the process of transferring employee Simple IRA accounts into Traditional IRA accounts.
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Inform your payroll services provider. If you use the services of a payroll company, you must instruct them to cease withholding Simple IRA contribution amounts at the end of the year.
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Tips & Warnings
There is no formal regulation regarding the time frame within which you must notify employees of your intention to suspend a Simple IRA. However, a minimum of 60 days before the end of the year is considered sufficient time for employees to prepare for the changes.
