Affiliated Service Group
A group of employees that are treated as employees of a single employer for purposes of certain employee benefit requirements under the Internal Revenue Code ( www.practicallaw.com/2-382-3555) (IRC) and the Employee Retirement Income Security Act of 1974 ( www.practicallaw.com/0-382-3434) (ERISA).
An affiliated service group consists of a "service organization" (meaning an organization, the principal business of which is the performance of services) and one or more organizations related to the service organization through ownership or a working relationship.
By arranging the ownership of related business entities in an artificial manner, the controlled group ( www.practicallaw.com/6-502-4658) rules under ERISA could be avoided. The affiliated service group rules were enacted to prevent the avoidance of these rules by expanding the controlled group to separate, but affiliated, entities.