What is a PEO?
PEOs are organizations that hire a company’s workforce and then lease it back to them, assuming all of the client company’s human resources responsibilities and employment risks in the process.
The arrangement offers many
administrative, legal and logistical advantages to smaller
businesses, however, PEOs have found meeting the retirement
plan benefit needs of their smaller clients problematic.
The new product, “The Plan”, allows PEOs to offer a retirement plan solution to all clients, no matter how small their staff. It provides one umbrella plan that serves all of a PEO’s client companies, allowing each one to customize its plan options to fit its employees’ retirement planning needs.
PEOs that offer The Plan to their client companies may choose up to 17 investment options from a list of 35 investment alternatives, and have access to a range of plan services, including:
- online enrollment and distribution processing,
- sponsor and participant Web sites,
- ERISA guidance and plan consulting,
- fund mapping,
- information on compliance testing deadlines,
profit-sharing contributions, and the preparation of IRS
and other regulatory forms
Other key features include:
- recordkeeping services that track plan assets on a company by company basis, enabling PEOs to give each client company detailed information about its own employees’ investments, and
- communications materials to help PEOs explain the benefits of The Plan to client companies and their employees