A company that maintains a SIMPLE-401(k)has the option of funding the plan by
I.Contributing 2% of an employee's salary up to a maximum of $5,300.
II.Match the employee's contribution up to a maximum of 3 percent of the employee's compensation with a maximum contribution of $12,000.

A)Only I is correct.
B)Only II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

A company that maintains a SIMPLE-401(k)has the option of funding the plan by
I.Contributing 2% of an employee's salary up to a maximum of $5,300.
II.Match the employee's contribution up to a maximum of 3 percent of the employee's compensation with a maximum contribution of $12,000.
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A)Only I is correct.
B)Only II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

Both statements are correct. The company sponsoring the SIMPLE-401(k) plan has the option to contribute 2% of an employee's salary or match the employee's contribution up to a maximum of 3% of the employee's compensation, subject to a maximum contribution limit of $12,000. As both statements are correct, option C is the correct choice.

A Company That Maintains a SIMPLE-401(k)has the Option of Funding