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SIMPLE 401(k)

What is a SIMPLE 401(k)?

The SIMPLE 401(k) has simplified rules for making owner and employee contributions -- thereby minimizing the time and effort required to administer the plan. Plus, by setting up your SIMPLE 401(k) plan through the Members Retirement Program, most of the administration is handled for you.

How much can employees or owners contribute?

Employees and owners can make pre-tax salary deferrals up to $12,500, plus a catch-up contribution of up to $3,000 for individuals age 50 and older, with no discrimination testing. Employee contributions occur before taxes, so they can reduce an employee’s taxable income.

Employer contributions are required each year and may be made either as:

  1. A matching dollar-for-dollar contribution — up to 3% of compensation (compensation limit for 2016 is $265,000) — to participating employees, or
  2. A non-elective 2% contribution to all eligible employees.

Employers can make the maximum contribution for themselves, whether or not employees participate and regardless of their participation level.

Contribution limits are $12,500 salary deferral plus a maximum employer match of 3% of income. Here’s an example of an owner earning $150,000 who is age 50 or over:

  • Maximum salary deferral: $12,500
  • Maximum employer match would be 3% or $4,500
  • Catch-up contribution: $3,000
  • Total 2016 Maximum Contribution $20,000

How simple is the administration?

The SIMPLE 401(k) plan requires no plan-level IRS filing or tax reporting and no compliance testing. Plus, there is no need to track vesting (all contributions are immediately available to the employee). And, because each participant has his or her own account, investment decisions are made by each participant, individually.

Request more information about SIMPLE 401(k)

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"AXA" is the brand name for the AXA Equitable Financial Services, LLC family of companies, including AXA Equitable Life Insurance Company. AXA S.A. is a French holding company for a group of international insurance and financial services companies, including AXA Equitable Financial Services, LLC. The obligations of AXA Equitable Life Insurance Company are backed solely by its claims-paying ability.

The Members Retirement Program (Contract Form #6059) is funded by a group variable annuity contract issued and distributed by AXA Equitable Life Insurance Company (New York, NY 10104, 212-314-4600).

Please consider the charges/ risks/ expenses/ and investment objectives carefully before purchasing a variable annuity. For a prospectus containing this and other information please contact a financial professional. Read it carefully before you invest or send money.

A group variable annuity is a long-term financial product designed for retirement purposes. In essence, a group variable annuity is a contractual agreement in which payment(s) are made to an insurance company on behalf of retirement plan participants, which agrees to payout an income or a lump sum amount at a later date to those participants. There are contract limitations and fees and charges associated with group variable annuities, which include, but are not limited to administrative fees and charges for investment management. Amounts in the annuity's variable investment options are subject to fluctuation in value and market risk, including loss of principal. Withdrawals from annuities are subject to an additional 10% federal income tax penalty. Withdrawals may also be subject to a contractual withdrawal charge. Contact a Retirement Program Specialist for costs and complete details. An annuity contract that is purchased to fund a retirement plan should be done so for the annuity's features and benefits other than tax deferral. For such cases, tax deferral is not an additional benefit. You may also want to consider the relative features, benefits, and costs of this annuity with any other investment that you may have in connection with your retirement plan or arrangement.

Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor.

GE-100118b (07/2015)

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