PEO Help.

[Guest MSP]

Have a potential PEO client that is under a multiple employer plan - each company has a seperate investement contract right now - one trust and owner of PEO is the trustee. Client wants to merge assets into one contract, wants to name an individual trustee for each company and wants to recieve comissions from the assets to offset adminstrative costs and reduce fee to companys. Comments????? Can there be one master plan with seperate trusts - how would hte 5500 be filed, with mulitple sch p? just like the ts? Is there any issues of the PEO receiving comissions - is that a prohibited transaction? Any ideas - any examples of what other peo's are doing?

[Guest kgsingletary]

Sounds like your potential client wants to convert their Multiple Employer Plan to a Single Employer Plan...reverse of what we've spent the last two years doing. The PEOs that I work with sponsor "Multiple Employer Plans". With MEPs, one Form 5500 and Sch H/I is filed along with a Sch T for each adopter. Manulife holds the assets under one contract and each adopter is assigned a Division/Employer Code such that reports can be generated for individual adopters. Hartford clients have a separate contract for each adopter. The trustee is usually a corporate officer of the PEO. As far as receiving "commissions" to offset fees...not too sure about that...I would guess that is not allowed. A better way to achieve this goal would be to setup investment contract so that fees are automatically deducted from participant accounts on a monthly or quarterly basis and paid directly to TPA or consultant. I'm not familiar with other investment companies as to their policy or procedures for automatic fee redemption.