Carpenter Morse Group
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United 401(k) Plans, Inc.
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Nicholas Pension Consultants
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Prime Pensions, Inc.
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Defined Benefit Calculation Specialist/Actuary The Angell Pension Group, Inc.
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Compass Retirement Consulting Group, Inc.
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Retirement, LLC
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Retirement Plan Legal Specialist Pentegra
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Central Pension Fund of the IUOE
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Jr Retirement Plan Administrator/ Administrative Assistant Hochheiser Deutsch & Co, Inc.
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Nova 401(k) Associates
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Trucker Huss, A Professional Corporation
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Retirement Plan Relationship Manager ERISA Services, Inc.
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Central Pension Fund of the IUOE
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Bates & Company
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Question 169: If a PEO adopts a multiple employer retirement plan in accordance with Rev. Proc. 2002-21, does that resolve all of the "Who's the Employer" issues in the arrangement? | |
Answer: Not at all. Indeed, this is one of the real challenges of a multiple employer plan situation. In some respects Rev. Proc. 2002-21 compounds the problem! For example, consider a staffing firm that handles both "permatemps" and true temporary employees. In my view, workers permanently assigned to a single company are not likely to be the common law employees of the staffing firm/PEO, but the temps who spend one week here and another week there almost surely are. However, under the Rev. Proc., the PEO cannot cover the temps under a plan unless the CO that happens to be using them this week cosponsors the plan. But those temps are the common law employees of the PEO and hence will have a negative impact on the PEO's coverage testing. This is just one of the issues that the IRS must consider as it moves forward with this important initiative. There are many others. Because of the complexity of the issue, and the comments and questions I have received, I have reorganized and expanded my coverage of Rev. Proc. 2002-21 on my Who's the Employer website. Each section explaining the Rev. Proc. now includes citations to it so you can easily find the original material. The following pages are available: |
Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.
The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.
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