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Can you choose from different financial institutions to deposit your Simple IRA? We are basically set up with a full service broker (fees ouch!). I believe we can transfer out, but I wonder if the Broker would tag us with a fee for that. Do you have full control of where your account is deposited?

No, you may not. Deductions from your paycheck must be deposited into the SIMPLE options and with the custodian selected by your employer. Once there, they may be transferred to any other IRA of your choice provided you have participated in the SIMPLE for at least two years. Transfers before that time will result in a 25% penalty tax. After two years' participation, that penalty does not apply. As to fees from the SIMPLE custodian, they may or may not apply depending on the agreement your employer has with that custodian.

It must be true that the present rules for a SIMPLE are different from the old rules for SEP-IRA. Where I used to work, there were about 5 total employees or so. When the boss wanted to set up a SEP, we all agreed that we wanted the legal maximum 15% of our pay taken out. We could each specify the financial institution. If I remember correctly, 2 of us picked Charles Schwab (down the street), one picked a mutual fund company, and I do not know about the other 2. So, in the case of an enlightened company management (we were all stockholders), a lot could be accomplished.

Present rules are different, I guess. That was about 1993, I think.
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