Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
May 16--The reasons behind this week's federal raid of a Powell human-resources business are still not clear, and recent history indicates that an explanation may not come quickly.
On Thursday, agents from the FBI and the IRS Criminal Investigation division removed boxes from HR Comp Employee Leasing, a "professional employer organization" or PEO, that provides clients with a package of human resources services.
Susanne Lee, a special agent with the IRS, declined on Thursday to give details about the action, and had no additional information on Friday. In a written statement, HR Comp said it is "operating appropriately in compliance with (the) law."
The action marked the second time in less than two years that the government has raided a local PEO. A company called Service Provider Group was raided by IRS and FBI agents in February 2013, and that company subsequently closed.
In the ensuing months, no details have been released about the raid targeting Service Provider Group. Lee declined on Friday to say whether an investigation was ongoing, and a search of federal court records showed no criminal case against the company.
An Alabama-based PEO called Lyons HR took on some clients and employees of Service Provider Group after its closure. Lyons CEO Bill Lyons said Friday that his company is accredited by an organization called the Employer Services Assurance Corporation, or ESAC.
That organization verifies a PEO's financial solvency and ensures that PEO financial activities are backed by $15 million in surety bonds, a process it compared to the role of the Federal Deposit Insurance Corp. for the banking industry.
"The thing about accreditation with the ESAC is it is a very, very transparent process," Lyons said. "Any PEO who does not want to subject themselves to that kind of rigorous financial oversight simply chooses not to participate."
HR Comp Employee Leasing drew scrutiny in recent years because of its political ties. According to state records, the company is represented by lobbyist Tom Ingram, who is also a political consultant to Gov. Bill Haslam.
In 2012, company CEO Andrea Ball and her then-husband, Chris Ball, drew media attention when they stood with Haslam at the ceremonial signing of legislation that set up a procedure for the Tennessee Department of Commerce and Insurance to regulate the PEO industry.
After the ceremonial signing, email messages surfaced revealing that the Balls had hired Ingram to help their companies deal with state government.
Andrea Ball had filed for divorce from Chris Ball in 2011. According to a final judgment subsequently issued in that divorce case, Andrea Ball -- who is now known as Andrea Rudd -- retained all of the ownership rights of the HR Comp family of companies, including HR Comp Employee Leasing.
(c)2014 the Knoxville News-Sentinel (Knoxville, Tenn.)
Visit the Knoxville News-Sentinel (Knoxville, Tenn.) at www.knoxnews.com
Distributed by MCT Information Services