SIMPLE IRA PLAN AT A GLANCE

The chart below provides some important points to know about the Simple IRA Plan.

Who Can Sponsor:

Self-employed, partnership, S-Corp and C-Corp with no more than 100 employees who earned at least $5000 in the preceding year.

Who's Eligible:

Can be restricted to employees who have earned a minimum of $5000 from the employer during any two preceding years and are expected to earn at least $5000 in the current year. You may designate less restrictive requirements at you discretion.

Who Contributes:

Employer and employee.

Employer:

Mandatory, matching or non-elective contribution match is dollar-for-dollar on employee's contribution up to 3% of compensation (in two years of any five-year period, match be be reduced to 1% of compensation); or non-elective contribution of 2% of compensation (up to $160,000 for 1999 and $170,000 for 2000) for all eligible employees.

Employee:

Any percentage payroll deduction up to $6000 annually.

IRS Reporting Requirements:

Summary Description No Form 5500 and no discrimination testing required.

Distributions:

Distribution taken from a SIMPLE IRA within the first two years after the account is established are subject to a 25% penalty tax. Withdrawals taken from the account after two years but before the participant reaches age 59 and half are subject to 10% penalty tax. The following exceptions apply to the penalty tax assessment:

* Death of the participant;
* Due to the disability of the participant;
* To pay medical expenses which exceed 7.5% of the participant's adjusted gross income;
* To pay medical insurance premiums during a period of participant's unemployment;
* To pay higher education expenses;
* To pay expenses related to a first time-home purchase; or
* In a series of substantially equal periodic payments over the life expectancy of the participants.

The information contained herein is not intended to constitute an offer to sell or a solicitation in connection with any product.