Retirement Plan Blog

04 | 6 | 2011 Posted By Jerry Kalish

 A "T", or technical foul, is part of the game of basketball. If you're a fan of the game, you know it's any infraction of the rules which doesn't involve physical contact such as unsportsmanlike conduct. 

The retirement plan equivalent of a "T" is when an employer misclassifies a worker in situations regarding whether:

• The worker is an independent contractor or an employee, or
•  An employee hired through a staffing agency/Professional Employer Organization (PEO) must participate in the client company's  retirement plan covering other employees.

The referee equivalent in these situations could be the Internal Revenue Service, the Department of Labor, State agencies, or all of them who have stepped up enforcement.

The financial consequences of misclassification could be costly in terms of income tax withholding; other employment related payments such as FICA, FUTA, state unemployment, and workers compensation; and retroactive inclusion in the retirement program. 

Staying with the basketball metaphor, I cover the issue of independent contractor vs. employee in my recent blog post,  Benefits Fouls, for BenefitsPro.com.  

The other side of the court involves leased employees and whether they are actually employees solely of the client company or the client company as a  co-employer with the PEO. It's a complicated topic that attorney Charles C. Shulman covers throughly in his article, Leased Employees and Employee Classification, on his Employee Benefits and Executive Compensation Blog.

So if you have any concerns about how you are classifying workers, then take a time-out and consult with your tax advisor. And even if you don't have any concerns, a periodic review of the status of each "non-employee" might  be helpful to avoid a "technical foul".

03 | 28 | 2011 Posted By Jerry Kalish

When I'm Sixty-Four is, of course, one of the classic songs by The Beatles, written by Paul McCartney (credited to Lennon/McCartney) and released in 1967 on their Sgt. Pepper's Lonely Hearts Club Band. 

The theme is about aging with a young man singing to his lover about his plans of them growing old together.

It was also one of the songs in their 1968 animated film, Yellow Submarine, the video for which follows:   

But that was in 1967 when retiring at that age was still a reality. No yellow submarine today - not with Americans’ confidence in their ability to afford a comfortable retirement at a new low. The "75" in the headline is a reference to Olivia Mitchell, a professor of insurance and risk at the Wharton School, who says that some employees may have to stay in the workforce to age 75 or older. 

Retirement preparedness, or lack thereof, will be the focus of my new weekly column for BenefitsPro the new blog published by Benefit Selling Magazine. Here is a link to my first post, The Challenge Ahead: Helping Employees Better Prepare For Retirement.