IRS Approval for Your PEO Retirement Plan
James B. Longacre
Edward C. Renenger
NAPEO Legal Insights
An important component of the PEO value proposition is the PEO’s ability to provide competitive and efficient retirement benefits to worksite employees. Most (if not almost all) PEOs sponsor a multiple-employer 401(k) plan for adoption by PEO clients for the benefit of worksite employees. Employees like 401(k) plans because they don’t pay taxes now on the money set aside on their behalf. However, to achieve this tax deferral, the plan must meet certain legal requirements.