Institute Releases Ad Hoc Survey on SIMPLE IRAs as of December 31, 2000

Washington, DC, March 20, 2001 - The Institute recently surveyed certain of its members in a continuing effort to track developments in the SIMPLE IRA market. (An earlier survey covered the first six months of 2000). The Institute's survey requested SIMPLE IRA data on the number of plans, number of plan participants, and value of the assets as of June 30, 2000 and December 31, 2000.

Survey respondents indicate that the number of SIMPLE IRA plans rose 14 percent and the number of participants increased 12 percent between June 30 and December 31, 2000. SIMPLE IRA assets invested in mutual funds were up 9 percent over the second half of 2000, with growth damped by equity market performance. During the second half of 1999, by comparison , the number of SIMPLE IRA plans rose 23 percent, the number of participants increased 23 percent, and SIMPLE IRA assets invested in mutual funds were up 46 percent. During 2000 as a whole, revised data indicate the number of SIMPLE IRA plans increased 34 percent, the number of participants rose 36 percent, and assets increased about 47 percent.

In addition, it appears SIMPLE IRAs continue to be most popular among very small businesses, with most SIMPLE IRA plans having 10 or fewer participants.

Survey respondents were not randomly selected, and therefore the results do not necessarily reflect the characteristics of the typical SIMPLE IRA account invested in mutual funds. Survey results represent an estimated 65 percent of the $6 billion SIMPLE IRA assets invested in mutual funds at year-end 1999.