Skip navigation

SIMPLE IRA Question...Again

or Register to post new content in the forum



  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Oct 15, 2008 10:29 pm

Ok guys,

  This situation really has me banging my head against the wall.  I have 2 clients that work for a small business (about 30 employees) that has a SIMPLE IRA plan.  The plan is for a Non-Designated Financial Institution.  I've read the adoption agreement (Schwab) 20 times.  It very clearly states that employees have the right to choose the financial institution for the SIMPLE IRA account.   Back in May I called the owner of the firm and told him I have 2 clients that want to enroll with my firm.  He said he was too busy to consider it (as if he has a F*cking choice, it's in his g*d d*mn adoption agreement!  MORON!) right now, but I should call him back in September to discuss it further.  So I accomodated his request, for obvious reasons.   I call him in September, and met with him Oct. 1.  He told me that he was going to take a week and try to "guage employee interest in having 2 providers," and "if a few people are interested, he'll allow it" (again, as if he has a choice!).    So I had a client call me this week and ask if he could switch I emailed the owner and asked him.  He responded again that he was too busy, and that I should contact him again in a year.  MOTHER FUCKER!    My question is - how can I proceed from here?  I don't give a shit about ever having the owner as a client - he's a complete jackass (and a DIYer jackass, at that).    Is it even legal for him to knowingly ignore his adoption agreement?  If so, does IRS get involved?  This guy just rubbed me completely the wrong way - now it's game time.   And yes, I realize that he could adopt a SIMPLE plan that DOES limit providers.  Point is this - He doesn't have one (and moreover, Schwab doesn't even offer that type of SIMPLE plan, so if this dickhead is hell-bent on screwing me over, he'll have to change providers entirely...which would still make me happy at this point, knowing that I wasted more of his time than he's already wasted of mine).    Seriously - and the reason he gave me for waiting another year?  He's too busy to change how he's doing things, and it won't add any revenue to the company.  I can't stand people that think they are too fucking important (he looks like a greasy slimeball that should've been working the Dungeons & Dragons booth at an RPG convention).
Sorry.  Rant over.  Responses appreciated!
Oct 15, 2008 11:11 pm

I’ve done it all before.  You are right.  It isn’t his choice.  The employees can do business with Schwab or any other B/D.  They can also use different mutual fund investments of their choice. or even stocks.  If he has a non designated financial institution or the ability for his employees to choose other mutual fund providers, you just get the employee to fill out their new account forms for the firm or mutual fund company that they want to be investing in.  Get the Simple IRA adoption agreement for the appropriate company and fill out everything you can indicating that it isn’t a NEW Simple but rather the same plan with an additional provider.  Your back office or the mutual fund company can help you.

  Take these forms to his office or have the employee do it or both of you.  All he needs to do is to sign the Simple IRA adoption agreement.  He probably doesn't want to be bothered with a bunch of paperwork and if you do the heavy lifting for him he might go for it.  Its just a matter of him signing the adoption agreement and having the employee and employer contributions sent to a different place.   The payroll contribution portion is another thing that often people don't want to deal with because it creates extra work for the staff.   But too bad.  It is in his agreement and he could be subject to some fines and penalties if he doesn't comply.   You probably don't want to beat him over the head with the legalities, but a hint that he is violating IRS and other labor laws might get his attention.,,id=137834,00.html   You might want to get a copy of his Simple IRA agreement and have your compliance dept give it a once over to make sure the employees CAN choose different institutions and investments.   I took several people in a dental office Simple IRA from American Express funds to Franklin Funds.  It wasn't that hard.
Oct 15, 2008 11:20 pm

Here is another link for you;   You might point out the the asshole....I mean employer that if he has already set up his simple as a 5304 it would be easier to accomodate those employees than to have to set up an entirely new 5305 DFI plan, if Schwab even offers such a thing.   Edit...they do, but the employer will have to use the IRS documents and what a pain.   In any case, it isn't much paperwork to allow the employees to use different institutions.... and why antagonize his own employees?
Oct 16, 2008 12:08 am

You’re funny Ice.  I’m surprised the employees haven’t been in his ear about it.

Oct 16, 2008 12:26 am

Ice, how long have your clients had their SIMPLEs?

Oct 16, 2008 1:19 am

That’s exactly where my question was headed.   You have to pick your battles.  There is just too little money involved to spend time on this stuff…unless somehow your clients are being hurt.

Oct 16, 2008 3:32 am

Go get 'em Ice!  In the end your tenacity and relaltionships with a handful of employees will win the greaseball over.  He’ll come to realize that some people still like to deal with people–not institutions.

Feb 1, 2009 8:38 pm

Hope you don't piss him off to the point that it reflects on the two employees that you are working with.....since they are why you came on the scene.