Plan service model
Financial professional provides individual advice on investment selection to each participant
Cost per participant
A one-time $10 setup fee and ongoing $10 annual fee
Pricing
Class A and C shares (commissionable) and Class F-2 (fee-based)
Investments
Participants choose from a wide range of American Funds, including the American Funds Target Date Retirement Series®
Default investment option
Because all investment selections must be made by participants, default investments are not necessary
Plan service model
Financial professional serves the plan with access to plan-level reports, simplified forms and an online, streamlined enrollment process
Cost per participant
A one-time $25 setup fee and ongoing $25 annual fee
Pricing
Class R-3 shares (commissionable) and Class R-5E shares (fee-based)
Investments
Plan sponsors can customize and simplify their menus by choosing which of the American Funds to make available to participants
Default investment option
Participants who don’t make an investment selection can be defaulted into a qualified default investment, such as a target date fund
Eligible employers — Any business with 1 to 100 employees, including state and local governments and tax-exempt organizations.
Eligible employees — Any employee who earned at least $5,000 during any 2 preceding years and who is expected to earn at least $5,000 in the current year must be allowed to participate; certain employees can be excluded. The employer may also specify less restrictive eligibility requirements on the SIMPLE adoption agreement to expand the group of eligible employees.
Employer contributions
— Dollar-for-dollar matching contributions limited to 3% of an employee’s compensation, which may be reduced to as low as 1% for 2 of every 5 years; or
— Across-the-board non-elective contribution of 2% of compensation for all eligible employees. Non-elective contributions are based on employee compensation up to $345,000 for 2024, which means that such contributions are limited to $6,900 in 2024.
Employee contributions
Taxes
Plan establishment
Funding of contributions
SIMPLE IRAs from Capital Group
— Capital Group prototype agreement: Because all contributions come to Capital Group, all accounts in the plan can be aggregated when determining sales charges. If the grouped assets reach a breakpoint, all participants benefit from the reduced sales charge. Participant accounts in the plan cannot be aggregated with personal accounts.
— Any other plan agreement: Because contributions may or may not come to Capital Group, accounts in the plan are not aggregated. Instead, a participant’s account may be linked with his or her other personal Capital Group accounts.