For the Craters & Freighters SIMPLE plan, is the company required to make contributions every year?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
. The Company recognized a gain of $15,729.
Note 9: Retirement Plan
The Company maintains a Savings Incentive Match Plan for Employees (SIMPLE), whereby the Company makes a matching contribution up to 3% of electing employees' compensation upon meeting age and length of service requirements. Contributions are made at the discretion of the Board of Directors. For the years ended December 31, 2024 and 2023, the Company elected to contribute $16,166 and $6,321, respectively.
Effective January 1, 2025, the Company established a 401(k) Retirement Plan (Plan) to replace the SIMPLE IRA plan. The Plan offers pre-tax and Roth contribution options for its participants. The Plan has a QACA Safe Harbor match feature equal to 100% of the first 1% of the participant
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 49)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters FDD, the company maintained a Savings Incentive Match Plan for Employees (SIMPLE). The FDD states that Craters & Freighters makes a matching contribution up to 3% of electing employees' compensation, provided they meet the age and length of service requirements. However, these contributions are not mandatory every year, as the FDD specifies that contributions are made at the discretion of the Board of Directors.
For the years ending December 31, 2024, and 2023, Craters & Freighters elected to contribute $16,166 and $6,321, respectively, indicating that while they have made contributions in the past, they are not obligated to do so annually. This discretionary aspect of the SIMPLE plan means that the availability of this benefit can vary from year to year, depending on the board's decision.
It is important to note that effective January 1, 2025, Craters & Freighters established a 401(k) Retirement Plan to replace the SIMPLE IRA plan. The new plan includes a QACA Safe Harbor match feature, which provides a more structured contribution. Specifically, the company matches 100% of the first 1% of the participants' compensation, plus 50% of the next 5% of their compensation. This change suggests a shift towards a more consistent and defined contribution approach compared to the discretionary nature of the previous SIMPLE plan.