Simple IRA's are for small businesses. Unfortunately, they are not well supported in many of these smaller establishments such as my own employer. When you are working for an employer, you may find that you do not have many options to invest in. Such was the case as my employer's fund options were limited to the fidelity adviser mutual funds, all of which suck carried fees of 1.5 to 2.5 %. This is a huge cost compared to the wonderful world of Vanguard mutual funds and ETFs often found to be less than .1% expense ratio. So, I decided I needed to do something about this infringement on my right to low-cost funds

Stage 1 - I looked through all of the forms associated with the Simple IRA and found that you could do a roll-over to another retirement account with a different custodian. So, this plan developed into investing in class-C shares, waiting for a year as the fee would be less if you held it for the year, then roll over into a traditional IRA which I could then invest in funds with massively lower fees. The problem with this method is that you have to wait a year and pay the 1% fee for a year and avoid the backend 1%. So, I set about looking into this other form I found -

Stage 2- I found a form label DFI asset transfer. SIMPLE IRA's have a unique feature called a designated financial institution (DFI). The employer can use one DFI or can ask each employee who they would like to keep their funds as their individual DFI. Well, since these are small businesses, most just use one DFI and they offer a small suite of high-interest rate funds to leech money off of the unwitting employees. Well, the IRS tax code came to save the day in this situation as there are special rules around SIMPLE IRA's that put the power back into the employees' hands. The code requires that it be made available to the employee that they could transfer their contributions free of fees or penalty to a custodian of their choosing. If the transfer is within 2 years of employment, it must be to a separate simple IRA. If you have exceeded two years of employment, you only need to have a custodian held retirement account and the transfers are allowed by the code. What I found to be deceptive, is the DFI asset transfer form actually says on it that the other custodial account must be a Simple IRA. This is contradictory to the IRS guidance and kind of makes you wonder: "are they trying to trap most people into this pit of substantially lower returns?". Yes, I believe the answer is yes. So, now that I have discovered I need to set something up which the form says not to, I write my current custodian a letter, to go along with all the other pulp to set up the automatic transfers.

So, now the plan looks like: Employer and employee contributions get auto-invested in a money market fund. It then gets disbursed once a month and mailed to preferred custodian where I can invest my funds in massively lower fee index funds. This should save the trouble of filling out a rollover form once a year, as well as 10 to 11 months of higher cost funds. So, there you have your employer high-cost fund escape plan. Several options, but the SIMPLE IRA makes it possible to move both your funds and your employer match into any IRA of your choosing.