Retirement Plan Relationship Manager ERISA Services, Inc.
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Compass Retirement Consulting Group, Inc.
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Defined Benefit Calculation Specialist/Actuary The Angell Pension Group, Inc.
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Jr Retirement Plan Administrator/ Administrative Assistant Hochheiser Deutsch & Co, Inc.
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Retirement Plan Legal Specialist Pentegra
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United 401(k) Plans, Inc.
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Retirement, LLC
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Nova 401(k) Associates
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Central Pension Fund of the IUOE
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Carpenter Morse Group
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Central Pension Fund of the IUOE
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Trucker Huss, A Professional Corporation
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Bates & Company
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Prime Pensions, Inc.
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Nicholas Pension Consultants
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Question 63: Please explain co-sponsorship of qualified plans between PEO's (staffing firms) and client companies. How does it work, what are the obstacles, etc.? |
Answer: As more and more companies realize that there are real questions about whether staffing firms employ those on their payroll, they also realize the difficulty of having those firms cover their workers under their qualified plans. Staffing firms are subject to the exclusive benefit rule (as are all other employers), which provides that qualified plans must only benefit employees of the sponsor (and their beneficiaries). If the staffing firm isn't the employer, then it can't sponsor a plan on its own. |
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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