Definition - What does SIMPLE Plans mean?

A SIMPLE plan is a retirement plan that is commonly offered by companies with no more than 100 employees. SIMPLE stands for Savings Incentive Match Plan for Employees of small employers. In the context of insurance, insurance companies often serve as trustees who manage SIMPLE plans on behalf of the employer.

Insuranceopedia explains SIMPLE Plans

SIMPLE plans are set up so that businesses can match contributions made by employees to these accounts or contribute to them in other ways. There are often tax credits associated with these plans, which is another incentive for businesses to use them. Employees benefit from SIMPLE plans because these plans help them save and prepare for retirement. When the employer makes matching contributions, this can be especially helpful. Administrative costs for SIMPLE plans are typically low and affordable for many small businesses.

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