SIMPLE IRA – Participation Notice & Summary Description
1. Overview
Impact Development Fund offers a SIMPLE IRA retirement plan for eligible employees. This notice explains eligibility requirements, contribution rules, employer matching, and distribution guidelines. Employees should review this information carefully before starting or changing their Salary Reduction Agreement.
Employer: Impact Development Fund
Address: 200 E. 7th Street, Suite 416, Loveland, CO 80537
Phone: 970‑494‑2021
Designated Financial Institution (DFI): Ascensus Trust
If the plan requires contributions to a designated institution, you may later transfer your SIMPLE IRA balance to another financial organization without penalty during the annual election window or other allowed periods.
3. Eligibility Requirements
To be eligible to participate, you must:
- Have earned at least $5,000 in any two preceding years, and
- Be reasonably expected to earn at least $5,000 in the current year
You are not eligible if you are:
- Covered under a collective bargaining agreement with negotiated retirement benefits
- A non‑resident alien with no U.S. income from the employer
- An employee excluded due to an acquisition or similar transaction
4. Election Periods
You may make or change elections during:
- The 60‑day window before each calendar year, and
- The 60‑day period before your first date of eligibility
During this period, you may start, stop, or change your salary reduction election.
5. Elective Deferrals
Employees may elect to defer a percentage of their compensation as pre‑tax SIMPLE IRA contributions.
Contribution Limits
- Elective Deferral Limit (2025): $16,500
- Subject to annual IRS cost‑of‑living adjustments after 2025
Catch‑Up Contributions
Catch‑up contributions are permitted under the plan for employees who will be age 50 or older by year‑end.
- Catch‑Up Limit (2025): $3,500
- Adjusted annually beginning in 2026
Enhanced Catch‑Up Contributions (Ages 60–63)
If you will be age 60–63 during the year, the plan allows increased catch‑up limits:
- The greater of $5,000 or 150% of the standard SIMPLE catch‑up limit
6. 110% Increased Contribution Limits (SECURE 2.0)
The employer may allow employees to defer up to 110% of the standard federal SIMPLE IRA limits if certain size‑based conditions are met.
This plan does not permit the 110% increased limits.
7. Changing or Stopping Contributions
- You may change your deferral percentage during the annual election period or other employer‑specified periods.
- You may stop deferrals at any time during the year.
- After stopping, you may resume deferrals on the first day of the next calendar year, unless the employer allows earlier resumption.
8. Employer Contributions
For 2026, the employer will provide:
Standard Matching Contribution
- Dollar‑for‑dollar match on employee deferrals up to 3% of compensation,
unless an alternative is elected.
Alternative Employer Contribution Options
Option 1 – Higher Match
A match up to 4% of compensation if elected by the employer.
Option 2 – Nonelective Contribution
Employer contributes 2% of compensation for all eligible participants who earn at least $5,000 during the year.
(Increased to 3% if the employer uses the optional 110% limit — not applicable here.)
Additional Nonelective Contributions
The employer does not make any additional nonelective contributions (up to 10% of compensation or $5,000).
9. Roth SIMPLE Contribution Options
The plan indicates:
- Employees may not designate elective deferrals as Roth SIMPLE contributions
- Employer matching or nonelective contributions cannot be designated as Roth SIMPLE contributions
All contributions will be pre‑tax.
10. Distributions
General Rules
- SIMPLE IRA assets are always 100% vested.
- Distributions may be taken at any time, but taxes and penalties may apply.
- The IRA custodian (not the employer) processes distributions.
Taxation
- Standard distributions are taxed as ordinary income.
- Roth SIMPLE distributions are tax‑free only if they meet qualified distribution rules.
Early Withdrawal Penalties
- 25% penalty if taken within the first two years of participation
- 10% penalty if taken after two years but before age 59½
- Exceptions apply for qualifying circumstances under IRS rules
Rollovers
- SIMPLE IRA → SIMPLE IRA: Allowed any time
- SIMPLE IRA → Traditional IRA/qualified plan: Allowed after 2 years of participation
- Rollovers avoid taxes and early withdrawal penalties
Required Minimum Distributions (RMDs)
- Begin at age 73, subject to IRS rules
11. Balance Transfers (DFI Plans Only)
If the employer uses a Designated Financial Institution:
- Annual transfer request period begins November 2 each year
- Transfers completed monthly at no cost
- Contributions must be invested in products with no sales charge until moved