Institute Releases Ad Hoc Survey on SIMPLE IRAs as of June 30, 2000

Washington, DC, September 14, 2000 - The Institute recently surveyed its members in a continuing effort to track developments in the SIMPLE IRA market. (An earlier survey covered the last six months of 1999.) The Institute's survey requested SIMPLE IRA data on the number of plans, number of plan participants, and value of the assets as of December 31, 1999 and June 30, 2000.

Survey results indicate that the number of SIMPLE IRA plans rose 17 percent, the number of participants increased 21 percent, and SIMPLE IRA assets invested in mutual funds were up 35 percent between December 31, 1999 and June 30, 2000. By comparison, during the first half of 1999, the number of SIMPLE IRA plans rose 30 percent, the number of participants increased 34 percent, and SIMPLE IRA assets invested in mutual funds were up 69 percent. During 1999 as a whole, revised data indicate the number of SIMPLE IRA plans increased 59 percent, the number of participants rose 64 percent, and assets increased about 150 percent. Growth in the second half of 1999 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 SIMPLE IRAs continue to be most popular among very small employers, with most participating employers 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.