Subscribe (Free) to
Daily or Weekly Newsletters
Post a Job

Featured Jobs

Retirement Plan Documents Specialist

Loren D. Stark Company
(Remote)

Loren D. Stark Company logo

Employee Benefits and Executive Compensation Associate Attorney

Verrill
(Portland ME / Boston MA)

Verrill logo

Retirement Plan Administrator

Farmer & Betts, Inc.
(Remote / WA)

Farmer & Betts, Inc. logo

Retirement Plan Administrator

Nicholas Pension Consultants
(Remote / Corona CA / Rancho Cordova CA)

Nicholas Pension Consultants logo

Distribution \ Loan Clerk

Retirement, LLC
(Remote / Oklahoma City OK)

Retirement, LLC logo

Sales Consultant

EPIC Retirement Plan Services
(Remote / Norwich NY / KY / MA / ME / OH / PA / VT)

EPIC Retirement Plan Services logo

Compliance Analyst

Pentegra
(Remote / West Harrison NY)

Pentegra logo

Retirement Plan Legal Specialist

Pentegra
(Remote / West Harrison NY)

Pentegra logo

Administrator/Consultant (DC and DB)

TPA Professionals
(Remote)

Retirement Plan Consultant

EPIC: TPA/DPS
(Remote / Norwich NY)

EPIC: TPA/DPS logo

Jr Retirement Plan Administrator/ Administrative Assistant

Hochheiser Deutsch & Co, Inc.
(Melville NY)

Hochheiser Deutsch & Co, Inc. logo

Retirement Plan Relationship Manager

ERISA Services, Inc.
(Remote)

ERISA Services, Inc. logo

Retirement Plan Administrator

Kentucky Trust Company
(Danville KY)

Kentucky Trust Company logo

Quality Assurance Manager

Bates & Company
(Remote / Winter Park FL)

Bates & Company logo

Executive Compensation Lawyer

Trucker Huss, A Professional Corporation
(Remote / San Francisco CA)

Trucker Huss, A Professional Corporation logo

Retirement Plan Specialist

RTD Financial Advisors
(Philadelphia PA)

RTD Financial Advisors logo

DC Plan Administrator

Retirement, LLC
(Remote / Oklahoma City OK)

Retirement, LLC logo

Employee Benefits & Executive Compensation Associate Attorney

Polsinelli PC
(Chicago IL / Dallas TX / Kansas City MO)

Polsinelli PC logo

Retirement Plan Consultant

Carpenter Morse Group
(Remote)

Carpenter Morse Group logo

Retirement Plan Administrator (TPA)

Retirement Plan Consultants
(Remote)

Retirement Plan Consultants logo

Fund Administrator

Plumbers Local Union No. 1 Benefit Funds
(Long Island City NY)

View More Employee Benefits Jobs

Free Newsletters

“BenefitsLink continues to be the most valuable resource we have at the firm.”

-- An attorney subscriber

Mobile App image LinkedIn icon
Twitter icon
Facebook icon

BenefitsLink > Q&A Columns >

Who's the Employer?

Answers are provided by S. Derrin Watson, JD, APM

Recipient Offsetting Staffing Firm Contributions

(Posted February 25, 1999)

Question 2: Suppose Recipient leases all its employees, other than its owner, from ABC Staffing Firm. ABC has a 401(k) plan which covers the workers leased by Recipient. Recipient wants to set up a money purchase pension plan. Assuming these workers are leased employees, can Recipient offset the contributions and deferrals to the ABC 401(k) plan?

Answer: If the workers are leased employees, then yes it can. 414(n) specifically provides that contributions by the leasing organization are deemed made by the recipient.

However, the real issue here is whether the workers are the common law employees of the recipient (as is so frequently the case). If they are then:

1. They are not leased employees; and
2. There is no authority for making the offset

In fact, to go a step further, if the staffing firm is not the common law employer, then the staffing firm plan would not be qualified because it would violate the exclusive benefit rule. Offsetting contributions made to a disqualified plan is not recommended!

The issue of whether the leasing organization or the recipient is the employer is discussed at length at Q 4:6 - 17 of my new book Who's the Employer?. .


Important notice:

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.


Copyright 1999-2017 S. Derrin Watson
Related links:

(restricted access)

(restricted access)

© 2023 BenefitsLink.com, Inc.