Massachusetts Life Producer Exam Practice 2026 – Comprehensive Prep

A SIMPLE (Savings Incentive Match Plan for Employees) retirement plan is designed to be an easy and cost-effective way for small businesses to offer retirement benefits to their employees. To qualify for establishing a SIMPLE plan, an employer must meet specific criteria regarding the number of employees they have and their compensation levels.

In the context of this question, the maximum number of employees earning at least $5,000 that allows an employer to set up a SIMPLE retirement plan is indeed 100. This stipulation ensures that the program is accessible to small businesses, promoting employee savings while not being overly burdensome for larger employers who traditionally have more resources and options for retirement plans.

The limitation on the number of employees is critical because it differentiates between smaller businesses, which may benefit from simpler retirement plans, versus larger organizations that typically have access to more complex retirement arrangements. By maintaining this cap at 100 employees, the IRS facilitates the establishment of SIMPLE plans in a way that encourages small employers to provide retirement savings options for their employees. Choosing a number greater than 100 would disqualify an employer from offering this specific type of retirement plan.