Employee sharing arrangements can lower retirement plan costs for professionals

Article Abstract:

Federal tax regulation Section 414(m) requires affiliated professional groups to provide shared employees with retirement plan benefits equivalent to the best plan of any member of the group. Affiliation may be through partnership, member-ownership, or stock ownership. Section 414(n) requires such groups to also provide lease-back employees with the same retirement benefits. The benefits in qualified plans can be reduced by the amount of Social Security contribution the employer must pay for the employee. Employers can avoid the requirements of Sections 414(m) and (n) yet acquire the benefits of an office sharing arrangement by operating by such formalities as maintaining separate business cards, names on the door, letterheads, billings, telephone listings, clients, and payrolls as much as possible.

Methods, Analysis, Human resource management

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Integrating qualified plan benefits with Social Security remains complex

Article Abstract:

Employers may be able to maximize deferred compensation for management and minimize the costs of fringe benefits for other employees by integrating qualified plans with Social Security. The changes in compensation plan rules made by the Tax Reform Act of 1986, and possible planning techniques in light of these changes are discussed.

Laws, regulations and rules, Tax planning, Social security taxes

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