In 1996, Congress permitted smaller employers to offer a Savings Incentive Match Plan for Employees (SIMPLE plan) as a way to encourage retirement savings. SIMPLE plans, which may be structured as an IRA or 401k plan, allow employees to make “elective” contributions to their retirement account. Employers must match employee contributions. Assets in the account grow tax-deferred and are taxed when they are eventually distributed to an employee. Employers may generally deduct contributions to employees’ accounts as a business expense. To encourage adoption of these plans, Congress exempts SIMPLEs plan from the need to perform complex nondiscrimination testing and to comply with burdensome top-heavy plan and reporting rules.