SIMPLE IRA Inquiry
Hello,
There is a company that sponsors a SIMPLE plan. The paperwork required at the SIMPLE custodian is a company profile and the SIMPLE plan adoption agreement. The owner of the company recently sold the business as a stock sale to one of the other employees in the company and the SIMPLE plan will continue as normal.
Is it necessary to get new SIMPLE plan paperwork on file signed by the new owner of the company? I realize you cannot comment on paperwork and operational requirements specific to the custodian, but in the event of an IRS or DOL audit, would it be a red flag if the current plan documents on file were signed by the previous owner of the company and not the current owner?
Any feedback would be appreciated. Thank you.
Permalink Submitted by Alan - IRA critic on Wed, 2020-11-25 00:29
The sponsoring employer is a corporation and while the shares have changed ownership, the plan is still sponsored by the same corporation. The original signature was presumably that of an officer of the corporation, so I doubt that the DOL would be concerned as long as the annual notice next following the change of stock control is signed by a current corporate officer. No specific guidance on this question is available in Notice 98-4 or SIMPLE IRA adoption forms.