In October 2010, Clark Corporation decides to establish a SIMPLE-401(k) for its employees. Clark meets all requirements for establishing a SIMPLE. The company has notified its employees that in 2011, it will fund the SIMPLE-401(k) by contributing 2% of each employee’s salary to the plan. Determine the maximum employee and employer contribution for Lei, an employee, in each of the following cases:
a. Lei’s salary is $62,000.
b. Lei’s salary is $280,000.
c. Assume the same facts as in part b, except that Clark funds the plan by matching employees’ contributions up to a maximum of 3% of each employee’s compensation. Lei contributes the maximum.
d. Assume the same facts as in part b, except that Clark establishes a SIMPLE-IRA and Lei contributes the maximum.
e. Assume the same facts as in part d, except that Clark funds the plan by matching an employee’s contributions up to a maximum of 3% of each employee’s compensation. Lei contributes the maximum.