The problem with former employees

I always say that the reason I don’t have employees is I was an employee once too. My joke about employee-employer relations is that no employer ever thinks they pay their employees too little and no employee thinks they get paid too much.

I recently dealt with the former employee of a client and the employee adamantly refused to provide information to the plan sponsor. It was to the point that the failure to furnish the plan sponsor with this information would have set back the former employee over $15,000 in taxes. That angry former employee just didn’t care. He would rather pay unnecessary taxes than provide the former employer with a simple asset statement. The point here is that one of the reasons that you should keep your plan in order, so you don’t have to deal with former employees, who may be so angry, that they will drop the dime on you through a complaint to the Department of Labor, or a needless lawsuit.

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