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Retirement Plans for Statutory Employees

“One of my business-owner clients employs ‘statutory employees.’ Does the owner have to cover these workers under a retirement plan established for the business?”

ERISA consultants at the Retirement Learning Center (RLC) Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans and other types of retirement savings and income plans, including nonqualified plans, stock options, and Social Security and Medicare.  We bring Case of the Week to you to highlight the most relevant topics affecting your business.

A recent call with a financial advisor from New York is representative of a common inquiry related types of employees and retirement plans.

Highlights of the Discussion

  1. Agent-drivers or commission-drivers,
  2. Full-time life insurance salespersons,
  3. Home workers, and
  4. Traveling or city salespersons.


An individual who performs services for a business may be classified as 1) an independent contractor, 2) a common law-employee, 3) a statutory employee or 4) a statutory nonemployee. Proper employee classification is critical for tax and employee benefit purposes. Therefore, it is prudent for business owners to seek competent tax guidance when making these determinations. The IRS explains each classification in more detail in Publication 15-A, Employer’s Supplemental Tax Guide [4].