Guest Kellie Smith Posted April 27, 1999 Posted April 27, 1999 I have an advisor in one of my offices with the following situation. Doctor uses the services of a PEO (Professional Employer Organization). Her employees, as well as, herself are leased thru this PEO to her company. The PEO has a 401(k) plan that covers her employees but this plan excludes highly paid employees from participating in this plan. (So Doctor gets left out) Question-- can the Doctor set up a plan for herself such as a Money Purchase or SEP? What would some of the complications be here since she is also a leased employee? Any help any of you can give would be great as I am a Region Vice President of Retail Retirement Plans with American Express Financial Advisors and we do not have ERISA attorneys in house I can run this by so it is up to me. Thanks. ------------------ Kellie Smith
Guest Charlie Stevens Posted April 30, 1999 Posted April 30, 1999 Is the doctor also an employee or the only non-leased employee? There is a possibility that a plan could be implemented providing that it does not provide benefits to non-leased employees but there is also a possibility that the leased employees would have to be included as the plan did its non-discrimination testing. What is the nature of the entity that leases the employees? A professional corporation? With more information, we might be able to get to the bottom of this. ------------------ Charlie Stevens Michael Best & Friedrich LLP
Guest pjgillum Posted May 6, 1999 Posted May 6, 1999 Does anyone out their work with any plans that cover leased employees? I am looking for information concerning 415 limits and 3% top heavy minimum allocations and testing for receipient plan when counting leasing organizations contributions for leased employee to the leasing organizations plan. Would the leasing organizations contribution count twords meeting the minimum allocation required for a top heavy receipient plan? Also would leased employees salary deferral contributions count as employer contributions and reduce the receipient plans contribution liability? Since a receipient plan may use the leasing organizations contributions to offset their liability is the 415 limit applied to the plans individually or are contributions for the same participant to both plans combined together?
Guest LMalone Posted February 4, 2000 Posted February 4, 2000 Proposed Reg. 1.414(o)-1(B) states that a Leased Owner, defined in sub(a) of same prop. reg., may participate in the leasing organization's plan, but that the Leased Owner's interest in such plan attributable to services performed by the Leased Owner for the recipient (i.e., his own company)is treated as a separate plan maintained by the recipient, covering only the recipient, and the Leased Owner is to be treated as an employee of the recipient. Trying to put this in plain English, it seems to be saying that John Doe (owner of Doe Company), leases his employees from ABC Leasing Corp. Let's assume John Doe meets the definition of "Leased Owner." John Doe wants to participate in ABC's 401(k), which offers deferrals only. Is the Prop. Reg. saying that John Doe's interest in the ABC plan is treated as if it were a separate plan maintained by Doe Company, with only the one employee? Has anyone done this? Is there a separate 5500 for this deemed separate plan? Is Doe Company the sponsor on the 5500? What implications would there be if John Doe is HCE or not HCE? What about top heavy implications for the ABC 401(k)? Or is this avoided by deeming Doe to have his own plan? I know I've posed many questions, but if anyone can offer thoughts on any of them or point me in a direction for further guidance, I'd appreciate it!
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