Plan service model
Financial professional provides individual advice on investment selection to each participant
Cost per participant
A one-time $10 setup fee and ongoing $10 annual fee
Pricing
Class A and C shares (commissionable) and Class F-2 (fee-based)
Investments
Participants choose from a wide range of American Funds, including the American Funds Target Date Retirement Series®
Default investment option
Because all investment selections must be made by participants, default investments are not necessary
Plan service model
Financial professional serves the plan with access to plan-level reports, simplified forms and an online, streamlined enrollment process
Cost per participant
A one-time $25 setup fee and ongoing $25 annual fee
Pricing
Class R-3 shares (commissionable) and Class R-5E shares (fee-based)
Investments
Plan sponsors can customize and simplify their menus by choosing which of the American Funds to make available to participants
Default investment option
Participants who don’t make an investment selection can be defaulted into a qualified default investment, such as a target date fund
Eligible employers — Any business with 1 to 100 employees, including state and local governments and tax-exempt organizations.
Eligible employees — Any employee who earned at least $5,000 during any 2 preceding years and who is expected to earn at least $5,000 in the current year must be allowed to participate; certain employees can be excluded. The employer may also specify less restrictive eligibility requirements on the SIMPLE adoption agreement to expand the group of eligible employees.
Employer contributions
— Dollar-for-dollar matching contributions limited to 3% of an employee’s compensation, which may be reduced to as low as 1% for 2 of every 5 years; or
— Across-the-board non-elective contribution of 2% of compensation for all eligible employees. Non-elective contributions are based on employee compensation up to $345,000 for 2024, which means that such contributions are limited to $6,900 in 2024.
Employee contributions
Taxes
Plan establishment
Funding of contributions
SIMPLE IRAs from Capital Group
— Capital Group prototype agreement: Because all contributions come to Capital Group, all accounts in the plan can be aggregated when determining sales charges. If the grouped assets reach a breakpoint, all participants benefit from the reduced sales charge. Participant accounts in the plan cannot be aggregated with personal accounts.
— Any other plan agreement: Because contributions may or may not come to Capital Group, accounts in the plan are not aggregated. Instead, a participant’s account may be linked with his or her other personal Capital Group accounts.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.
All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.
Use of this website is intended for U.S. residents only. Use of this website and materials is also subject to approval by your home office.
American Funds Distributors, Inc.
This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.