PEO retirement plan

[Guest jim williams]

I have a potential client which is a leasing company that currently cosponsors a 401(k) plan with their client organizations for worksite employees as a multiple employer plan. I believe that if the leasing company wants to also establish a single employer plan on behalf of their nonworksite employees that this is permissable. In fact, single employer plans sponsored by a PEO can only cover nonworksite employees. Is my interpretation correct? Should I be considering other issues?

[ETA Consulting LLC]

Not necessarily. A single employer plan can cover any employee of the employer sponsoring the plan. You can draft any plan to exclude any non-discriminatory group of employees (meaning you must pass the appropriate coverage the non-discrimination tests each year).

Good Luck!