SIMPLE problems: the only way your simple plan will ever RIVAL a 401(K) is if you get out and fight for it.(Tax Talk)

ENTREPRENEURS ARE WEARY OF BEING left behind. They want equal treatment when it comes to the tax and contribution features of pension plans. Now, groups representing small businesses are pushing Congress to put SIMPLE (Savings Incentive Match Plan for Employees) on the same footing as the 401(k).

When Congress tried to help more small businesses launch pension plans, it created SIMPLE in 1996 to clear regulatory hurdles of 401(k) plans. Legally, employers with 100 or fewer employees who receive at least $5,000 in compensation can adopt a SIMPLE plan.

But lawmakers neglected to make the contributions and thus the tax deductibility of SIMPLE plans equal to 401(k) plans. For example, those under the age of 50 in a 401(k) plan can save up to $12,000 annually in pre-tax dollars in 2003, while small-business owners and employees under 50 can only put away $8,000 in a SIMPLE plan. (Recent law changes allow those 50 or older to make additional "catch-up" contributions for both SIMPLE and 401(k) plans.) That's a 57 percent greater contribution for employees in companies with 401(k) plans. Although small firms are free to establish 401(k) plans, many don't because of the complexity and cost involved. In addition, 401(k) contribution limits are increasing by $1,000 each year until 2006 when the 401(k) maximum contribution reaches $15,000. At that ...