Retirement SIMPLE IRA annual notice resources

Invesco is required to provide an Annual Summary Description for your SIMPLE IRA plan to you each year. As the employer maintaining a SIMPLE IRA plan, you are required under the Internal Revenue Code to notify all eligible employees annually of their right to participate in the plan, enter into a salary reduction agreement or to modify a prior agreement, and to receive employer contributions. Employers must provide a copy of the Annual Summary Description of the plan to all eligible employees prior to the 60-day election period immediately preceding January 1, 2027.

Consistent with the prior year, the IRS has not yet updated the IRS Model Form 5304-SIMPLE, or the Model Notification to Eligible Employees, or the Model Salary Reduction Agreement with any SECURE 2.0 changes. To ensure the information you provide to your employees is accurate and up-to-date, Invesco created an Annual Summary Description and related Notification and Salary Reduction Agreement for the 2027 plan year that includes certain relevant SECURE 2.0 information. It is important to note that your annual obligation as the sponsoring employer is to provide eligible employees with an Annual Summary Description along with your notice and salary reduction agreement. There is no specific requirement to provide participants with the IRS Form 5304-SIMPLE.

Your previously completed Form 5304-SIMPLE still serves as the governing plan document for your SIMPLE IRA. You should continue to keep the Form 5304-SIMPLE with your plan records along with the completed SECURE 2.0 Election Form for SIMPLE IRA Employers. Together, these documents provide evidence that you have adopted a SIMPLE IRA plan and include written SECURE 2.0 elections for your plan.

No. This SECURE 2.0 provision is optional. If you, as the sponsoring employer, do not want to track special limits for the age 60-63 participants, then you do not have to adopt this provision. If you choose not to offer increased catch-up contribution to this age group, then leave this option unchecked on your SECURE 2.0 Election Form and the Annual Summary Description and Notification to Eligible Employees.

Yes, Invesco’s SIMPLE IRA product supports Roth employee contributions when elected by the employer. This is an optional feature available to your plan and can be elected on the enclosed SECURE 2.0 Election Form for SIMPLE IRA Employers and Annual Summary Description. (Note: Roth employee contributions are contributed using after-tax dollars and receive tax-free treatment on earnings when certain conditions are met. Employers electing to offer Roth employee contributions may need to work with their payroll providers to ensure Roth contributions are treated properly for payroll tax purposes.)

No. The change to add Roth must be made in conjunction with the annual enrollment/election period, with notice of the change provided prior to the annual enrollment/election period.

No. This feature under SECURE 2.0 is optional. As the sponsoring employer, if you prefer not to track (after-tax) Roth employee contributions vs (pre-tax) Salary Reduction contributions, then you do not have to adopt this provision. If you choose not to offer Roth employee contributions under your plan, then leave this option unchecked on your SECURE 2.0 Election Form and the Annual Summary Description and Notification to Eligible Employees.

Note: Employers or their payroll administrators must accurately label contribution types when remitting and depositing in the plan (Employee Roth vs. Employee Salary Reduction vs. Employer contributions). Any contribution deposits not identified will be deposited by Invesco as Employee pre-tax Salary Reduction.

Employers that do not complete and distribute the Annual Summary Description and Notification to Eligible Employees as described within, may be subject to IRS penalties until the notification requirement (including the Annual Summary Description) is met.

Your financial professional or tax advisor should be able to provide you with guidance on completing the document. Invesco Client Service representatives are unable to provide guidance or tax advice.

No. The documents should not be returned to Invesco nor forwarded to the IRS. Please keep the original completed documents with other plan records.

Current employees who wish to modify their contributions to the plan should complete the Salary Reduction Agreement and return it to the employer no later than December 31, 2026. Employees who become eligible during the 2027 plan year should complete the Salary Reduction Agreement and return it to the employer during the 60-day period prior to the date the employee becomes eligible.

Annual salary and contribution limits (including age based catch-up limits) may be changing for 2027.

The IRS generally announces any Cost of Living Adjustments (COLAs) to contribution limits for the next calendar year during the 4th quarter of the current calendar year. Please note that the COLAs for 2027 have not been released as of the time of this mailing. Once the COLAs are released by the IRS, the information will be posted on our website as well as irs.gov. Visit invesco.com/us or irs.gov and search “COLA” for current contribution limits.