Institute Releases Ad Hoc Survey on SIMPLE IRAs as of December 31, 1999

Washington, DC, March 28, 2000 - The Institute recently surveyed its fund members on trends in the SIMPLE IRA market during the period from June 30, 1999 to December 31, 1999. (An earlier survey covered the first six months of 1999). The Institute's survey requested SIMPLE IRA data on the number of plans, participants, and assets as of June 30, 1999 and December 31, 1999.

Survey results show that 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 49 percent. During 1999 as a whole, results indicate the number of SIMPLE IRA plans increased 59 percent, the number of participants rose 65 percent, and assets increased about 150 percent. Growth in the second half of the year was slower than in the first half, in part because employers generally are not permitted, under IRS regulations, to form new SIMPLE IRA plans after October 1 of any given year.

In addition, it appears that the SIMPLE IRA continues to be most popular among very small employers, the market for which it was designed. Eighty-seven percent of SIMPLE IRA plans have 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 88 percent of SIMPLE IRA assets invested in mutual funds at yearend 1998.