Lassitude Inc a new and rapidly growing company ddoesnt have

Lassitude, Inc., a new and rapidly growing company, ddoesnt have a quailified plan. However, the company would like to provide a salary savings plan for its employees in order to retain it current and new employees. Assuming that Lassitude decides to implememtn a SIMPLE, which one of the following statements is true?

A. Lassitude, Inc. has 100 or fewer employees

B. An independent contractor would have to be hired to deal with the complicated paperwork invovled

C. Lassitude employees can rest assured that their savigs will provide adaquate retirement benefits.

D. Lassitude management will have to discolse to its employees that thier saving swont be portable.

Solution

SIMPLE emplyee savings plan, is a tax deferred retirement plan plan for small companies having less than 100 emplyees.

The employees make tax deferred contributions into the savings account annually ,the company may also make contribitions annually into the retirement savings account, a part of their salary generally 3% of their salary to the retirement savings account. in case the employee does not credit funds to their savings account , in these cases the employer is mandated to contributed 2% of the respective employee salary to the account.

the employer gets tax credit for the amount contributed to the employees account.

the correct option is A.

we cannot say, weather the savings will be adeqaute for the emplyees,as different employees will have different needs for retirement about which we are not aware of. so C is incorrect.

there is no such tedious paper work involved in this plan. so option B is incorrect. almost all retirement plans are portable, that it can be transferred if the employee leaves the company.