Lost and found - retired employees

Article Abstract:

A number of companies are introducing retiree-work programs in their bid to rehire retired employees. Through such initiatives, these organizations can once more enjoy the loyalty, experience and flexibility of these people at significant cost savings. Retiree-work programs are suitable particularly to companies discovering that downsizing has cost them precious talents through early-retirement plans. In the face of spare staffing, they find out that they need to fill staffing gaps with low-cost, experienced talent, which retired employees can easily provide. Given that hiring a retiree is more cost-effective than finding new or temporary workers, retiree-work programs should be all the more attractive. Companies interested in bringing back retirees should consider the legalities and deal with the misperceptions of managers regarding retired people.

Employee selection

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The IRS finds invisible employees

Article Abstract:

Employee misclassification, through retired employees hired as independent contractors or 1099 wage earners, can pose serious tax problems for a company. The source of this potential tax risk is the IRS and the General Accounting Office's program that matches 1099 wage earners with their companies and a payroll audit which includes a review of the year-end distribution of 1099s of a company. A firm must, in its preparation for a payroll audit, implement measures to prevent risk of significant loss. The company must be aware of the attention the IRS will place on employees who gather income from a single 1099, contractors or consultants who furnish services that are substantially the same as those provided by employees of the company, and retired workers rehired for consulting services.

Finance, taxation, & monetary policy, Accounting and auditing, Tax deductions, Independent contractors, Payrolls

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New tax law could jolt retirement plan payoffs

Article Abstract:

A new tax on excess distributions and undistributed benefits related to qualified retirement plans is discussed to demonstrate how the new law will affect individuals who will be receiving benefits from qualified retirement plans, such as tax-sheltered annuities and individual retirement accounts. The tax is slated to take affect on April 15, 1989, and it is important that human resources professionals working in companies, which are bound by law to supply plan balance and benefits information, are aware of the implications of the new tax.

Interpretation and construction, Taxation, Tax law, Pension funds, Individual retirement accounts

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