Small employers with 100 or fewer employees commonly offer which plan?

• A. SIMPLE Plans
• B. SEP Plans
• C. 401(k) Plans
• D. 403(b) Plans

Answer: (A)

Small employers with 100 or fewer workers tend to choose SIMPLE plans because they’re built for small businesses: easy to set up, inexpensive to administer, and they allow both employee contributions and employer contributions with straightforward rules. An employer can either match a portion of each employee’s deferral or make a fixed nonelective contribution, which encourages participation without the heavy compliance and testing required by larger plans. SEP plans are even simpler in some ways but only allow employer contributions and don’t let employees contribute on their own, which is less flexible for employees. A 401(k) plan offers more features and higher limits but comes with greater administrative complexity and cost, making it less common for very small firms. A 403(b) plan is aimed at non-profit organizations and public schools, not typical for small for-profit employers.