Are Your Lawyers Transitioning to "Of Counsel?"
Do you have senior partners, shareholders or other lawyers transitioning to “of counsel” status this year?
In many cases, those considered “of counsel” are independent contractors paid via Form 1099-R as opposed to Form W-2. Individuals properly designated as independent contractors are not common law employees of the firm. As a result, they are not eligible to make additional contributions to your retirement plan, and their participant status should be updated to “terminated.”
You must notify the ABA Retirement Funds Program ("Program") to update any "of counsel" participants' status to “terminated” if they are no longer considered employees of the firm.
Your lawyers who are “of counsel” status can establish an owner-only 401(k) or other type of retirement plan through the ABA Retirement Funds Program (“Program”) if they are considered self-employed and would like to continue to contribute to a retirement plan. Advise your participants that they can contact a Program representative at 800.826.8901 or joinus@abaretirement.com to discuss this option further.
For plan sponsor use only. Not for use with participants.
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