Rehired retirees 1357

  • Our company has used rehired retirees as a source of experienced technical expertise and surge capacity to the mutual benefit of all. They are announcing termination of all such contracts due to compliance to SOX and EIRISA?. Is there anything inherent in these laws that would require such action, for example a waiting period or a benefits waiver? Are others experiencing similar action?

  • No SOX requirement related to rehiring retirees.

  • While there’s no impact on SOX, there can be HR type impacts (esp. in special ‘early retirement’ situations). You might investigate using a consulting firm to facilitate this , where they are an intermediary that can maybe help keep the needed ‘arms length difference’. Research the rules very carefully to protect both your company and the employee.
    Hopefully, it’ll work out well for you, as it’s a good thing to bring back business and technical knowledge 🙂

  • I’ll add to my brief reply above. There are quite often rules related to retirement plans that could make it difficult to rehire a retired employee. These rules may limit the hours to be worked or benefits provided to the employee. You can usually get around these by bringing a retiree on as a ‘consultant’ versus a salaried employee. SOX didn’t do anything to change these rules, but has heightened the awareness of following the rules to the letter.

  • Thanks all. The issues seems to be an ERISA requirement for a period of separation and some arms-length indicators to assure that rehired contractors are not pseudo-employees with a claim on benefits programs. SOX has raised the issue of reporting and validation of compliance to the CEO level, hence the sensitivity to avoid any threat to the benefit program qualification that could place this certification in jeopard. As noted there are some work-arounds using third-party agents and we are exploring these. I feel my question is answered for now.

  • Even the IRS does not allow Pseudo Employees.

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