Question 338: When will your next book be available? Now the real question, is a private equity firm considered a service organization for the ASG rules?
Answer:
Let's answer both questions.
I am delighted to announce that the 7th edition of Who's the Employer should be available April 24, 2017. I am even more pleased to announce that it will be available exclusively in an online edition through ERISApedia.com.
One of my great sorrows with the 6th edition is that it come out months before the DOL issued its landmark guidance on Open MEPs. I wanted to update the book for that, and a year later for the Windsor same-gender marriage decision, and a host of other issues. There was no real way to do so without making a new edition. With the new online 7th edition, I not only bring everything up to date, but I will be able to update it on a going forward basis. If the Supreme Court later this year answers the question "What is a church plan?" I plan to have the 7th edition updated with a month or less.
It's been fun working with ERISApedia. There are hyperlinks for almost all the laws, regulations, agency guidance, and court decision cited in the book to take you immediately to the source material, which conveniently opens in another tab. Their interface is intuitive and very well designed. Best of all, we are keeping the same price as the 6th edition, even though I've added over 100 new examples, plus extensive new discussion on QSLOBs, an important piece of the related employer puzzle for larger employers. For more information, click here.
Thank you for asking! It was well timed.
Now let's look at the "real" question. Service organizations are in one of eight specialized fields (health, law, accounting, consulting, etc.). None of those apply here. Alternatively, a business is a service organization if capital is not a material income-producing factor. Whether or not capital is a material income producing factor is decided on the basis of all facts and circumstances. Prop. Treas. Reg. §1.414(m)-2(f)(1).
So, consider a private equity firm. Is capital a material income producing factor? You bet it is! Capital is really the only income producing factor. The firm raises capital and uses it to invest. Truly, it is the antithesis of a service organization. So a private equity firm cannot be an FSO or an A-Org and it is very unlikely that it is a B-Org.
For further discussion of these issues, see Chapter 13 of Who's the Employer.

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