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COLLECTED WISDOM™ on Multiple Employer Plans (MEP)

This page gathers relevant information related to DOL's proposed regulations on Multiple Employer Plans (MEP). Other items related to MEPs may also be covered.

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

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MEPmentum Continues: DOL Issues Guidance on 'Open' MEPs

Abstract: Many members of the retirement community have long advocated for expanding the availability of multiple employer plans as a way to encourage more small employers to sponsor retirement plans. However, certain requirements under ERISA and the Internal Revenue Code limit the availability of MEPs for most employers. MEP initiatives have gained steam in recent months as the two federal agencies most directly responsible for administering ERISA and its related provisions under the Code have issued guidance intended to expand access to MEPs, while even more dramatic changes at the regulatory and legislative level may be forthcoming.

Source: Groom.com, September 2019

Small Business and Retirement Savings: The Push for Multiple Employer Plans

Abstract: Federal regulators and lawmakers have been moving toward making plans more attractive for small business by expanding a previously obscure concept: the "multiple employer plan," which is a single plan in which numerous small, unrelated companies sign up for a centrally administered retirement plan whose sponsor takes on the burdens of choosing investment providers, tracking contributions and account balances, communicating with participants, making distributions, dealing with government filing requirements, and resolving claims disputes.

Source: Steptoe.com, August 2019

MEPs: A Timely Refresher

Abstract: Multiple employer plans (MEPs) figure prominently in many discussions about workplace retirement plans today. And with those discussions including changes that would expand their availability and use, an Aug. 6 webinar provided a useful refresher on the federal rules governing MEPs which are summarized here.

Source: Napa-net.org, August 2019

DOL Moves on Multiple Employer Plans

Abstract: The structure of the DOL's final regulation is not significantly different from the proposed MEP regulation. Thus, the final regulation provides conditions under which a "bona fide" group or association or PEO may act as an "employer," as defined under ERISA, and sponsor a MEP. DOL states that the Final Regulation supersedes decades of prior sub-regulatory guidance.

Source: Groom.com, August 2019

DOL's Final MEP Rule: What It Means for the Retirement Industry

Abstract: To avoid the MEP commonality requirement entirely, employers and service providers will have to wait and see if the SECURE Act (or other statutory relief) becomes law. In the meantime, the DOL's Association Retirement Plans Rule provides relief for -- and a clear path toward -- plan sponsorship by trade associations and similar employer groups the members of which have industry or geographic ties.

Source: Drinkerbiddle.com, August 2019

Understanding the DOL's New Rule for Multiple Employer Plans

Abstract: For decades, small businesses and their employees have been disadvantaged by the limited availability of high-quality, low-cost retirement plans. But this is all set to change by the end of third quarter this year, when a new rule from the DOL takes effect, seeking to expand the access of Multiple Employer Plans. Learn more here about the DOL MEP rule and some of the advantages businesses and their employees can realize from participating in a MEP.

Source: Planpilot.com, August 2019

Final Regulations Expand MEP Options

Abstract: In 2018, roughly 38 million private-sector employees did not have access to a retirement plan. This troubling statistic led the Trump Administration to issue an Executive Order, directing the DOL and the Treasury Department to issue guidance that would help increase participation levels in employer-sponsored retirement plans. On July 31, 2019, the DOL fulfilled this directive by releasing final regulations on association retirement plans, also known as multiple employer plans, or MEPs.

Source: Ascensus.com, August 2019

DOL Finalizes MEP Regulation

Abstract: This article briefly reviews the legal background and the final regulation. It then reviews DOL's discussion, in the preamble to the final regulation, of the fiduciary obligations of an employer that adopts a multiple employer plan. Finally, it concludes with a brief discussion of the separate Request for Information on Open MEPs also released on July 22, 2019.

Source: Octoberthree.com, August 2019

DOL Publishes Final Rule on Association Retirement Plans and Other MEPs

Abstract: The DOL has published its final rule clarifying the circumstances under which an employer group or association or a professional employer organization could sponsor a multiple-employer workplace retirement plan. Under the final rule, a bona fide group or association of employers or professional employer organization would be able to serve as the sponsor of a pension plan, within the meaning of Section 3(2) of ERISA. Although a majority of MEPs will likely be set up as 401k plans, the final rule applies to all "employee pension benefit plans" established under Section 3(2) of ERISA, which means that it could apply to non-401k plan arrangements, such as employee stock ownership plans.

Source: Hklaw.com, August 2019

DOL Small Business Retirement Plan Rule Not the Cure-All That's Needed

Abstract: In a nod to the small business community, the Department of Labor issued a final rule earlier this week that may nudge more employers to offer joint retirement plans -- MEPs -- but it's not all that employers were hoping for. "This is NOT the MEPs that everyone has been so excited about," says Nevin Adams, chief of marketing for the American Retirement Association.

Source: Forbes.com, August 2019

New Access to Multiple Employer Retirement Plans and Potential New Protections for Participating Employers

Abstract: The new guidance from the DOL and the proposed compliance relief from the IRS have the potential to increase both the availability and the attractiveness of MEPs as an opportunity for small employers to pool retirement plan resources and collectively negotiate for better fees and services.

Source: Sgrlaw.com, August 2019

DOL Move Expands Definition of Employer for Multiple Employer Plans

Abstract: The DOL published its highly anticipated Final Rule, which allows working owners with no employees and companies in unrelated industries to band together to create a single defined contribution retirement plan for their employees, known as a multiple employer plan (MEP). Specifically, the Final Rule expands the definition of "employer" under Section 3(5) of ERISA to allow bona fide employer groups and professional employer organizations to act as an "employer" for purposes of sponsoring a MEP.

Source: Ballardspahr.com, August 2019

DOLs First Housekeeping Step in Getting Ready for New MEPs and Group Arrangement Rules

Abstract: It's not just going to be challenging for benefit professionals: the IRS the DOL are also going to have a number of challenges in regulating MEPs. The promise of the advantages of scale offered by these new arrangements may be valuable, but it involves the regulators translating rules, procedures, investigations and audits generally applicable on an individual plan into some sort of combined plan basis as a normal part of its activities. Which explains in large part the DOL's new Field assistance Bulletin, 2019-01.

Source: Businessofbenefits.com, July 2019

Request for Information on Open MEPs

Abstract: This document is a request for information regarding the definition of "employer" in section 3(5) of the Employee Retirement Income Security Act of 1974, as amended (ERISA). The document mainly seeks comments on whether to amend our regulations to facilitate the sponsorship of "open MEPs" by persons acting indirectly in the interests of unrelated employers whose employees would receive benefits under such arrangements.

Source: Benefitsforward.com, July 2019

DOL Issues Association Retirement Plan (a.k.a. MEP) Final Regulations

Abstract: Scheduled for publication in the Federal Register this week are Department of Labor (DOL) final regulations on association retirement plans, a name that in very general terms equates to multiple employer plans, or MEPs. In addition to the final regulations, the DOL has issued a companion request-for-information document, "Open MEPs" and other issues.

Source: Ascensus.com, July 2019

Fiduciary Clarity Needed for Successful Open MEP Expansion

Abstract: Should the SECURE Act become law and permit open multiple employer plans to exist without a common nexus, one of the biggest benefits for advisers will be the increased ability to scale their practices. But, open MEPs, as detailed in the SECURE Act, offer a structure for a small plan to get maximum fiduciary support, experts say, but the roles and responsibilities of all the parties involved can be hard to keep straight.

Source: Planadviser.com, July 2019

IRS Proposes Multiple Employer DC Plan Rules

Abstract: IRS proposed regulations would ease the threat of plan disqualification due to "one bad apple" for multiple employer defined contribution plans that meet documentation, notice and process steps. This supplements proposed guidance from DOL in 2018 and efforts on the Hill to expand access to multiple employer plans.

Source: Buck.com, July 2019

IRS Proposes Rule to Ease Liability Under 401k Multiple Employer Plans

Abstract: The IRS has proposed a rule that would make 401k multiple employer plans (MEPs) more attractive, especially for small employers, by addressing the risk posed to a MEP by one member's bad actions.

Source: Shrm.org, July 2019

Proposed Treasury Regulations on MEPs a Good Start

Abstract: The new rules would provide relief for defined contribution MEPs that include a participating employer that jeopardizes the plan through failure to comply with certain qualified plan rules. Under the existing rules, one noncompliant employer within a MEP can disqualify the entire plan, creating significant problems for the other participating employers. If these proposed regulations become final, they will remove an important compliance hurdle for employers considering -- or already in -- a MEP.

Source: Ascensus.com, July 2019

Long-Awaited Proposed IRS Rules Would Alleviate "One-Bad-Apple" Rule for Multiple Employer DC Plans

Abstract: The proposed regulations provide a detailed road map for a defined contribution MEP to avoid disqualification in the event of a participating employer's qualification failure. As a threshold matter, the plan administrator must have established practices and procedures (formal or informal) that are reasonably designed to promote and facilitate overall compliance with applicable Code requirements, including procedures for obtaining information from participating employers to identify and correct errors (e.g., nondiscrimination testing, top-heavy contributions).

Source: Groom.com, July 2019

Employee Benefit Plan Review: The "New 401k"

Abstract: The Department of Labor issued proposed regulations on October 22, 2018 that represent the first major step in changing its restrictions on multiple employer plans. However, this is just the first step, and does not change the landscape for Open MEPs.

Source: Cowdenassociates.com, July 2019

The Illusory Benefit of the IRS's Proposed Correction to the MEP "One Bad Apple" Rule

Abstract: The proposed reg is welcome as a purely technical and structural matter. But the relief may be mostly illusory. The "bad apple" problem has always sounded worse than it is and may have been able to be fixed by a simple adjustment to the Maximum penalty Amount rules under EPCRS, and to the rules as to who should be responsible for that penalty.

Source: Businessofbenefits.com, July 2019

IRS Proposes Curtailing 'One Bad Apple' Rule for MEPs

Abstract: The IRS issued a proposed regulation to water down the "one bad apple" rule that critics claim has prevented broader uptake of certain retirement plans by employers. Under current rules, if one of the employers in a MEP makes a mistake the entire plan is disqualified. The IRS's proposal would "significantly curtail" this rule.

Source: Investmentnews.com (registration may be required), July 2019

Open MEPs Could Be an Attractive New Pool of Assets in a Mature DC Market

Abstract: Cerulli Associates notes that the creation of open multiple-employer plans is expected to create an attractive new pool of assets within a defined contribution market that is otherwise mature and experiencing flat to negative growth. As of year-end 2018, MEP assets totaled $211 billion, which represents a 21% increase from 2015.

Source: Cerulli.com, June 2019

New 401k Legislation Drives Optimistic Outlook for MEPs

Abstract: How do we get a flat 401k market moving again? It's a question asked and answered by global research and consulting firm Cerulli Associates. The firm is looking hard at open MEPs as a catalyst for DC development, a space it says is mature and experiencing flat to negative growth. current legislative proposals, aimed at expanding retirement plan access for small business employees, will reduce or eliminate the "common nexus" requirement with their support of open MEPs.

Source: 401kspecialistmag.com, June 2019

The Future Open-MEP Market

Abstract: Legislation in the U.S. House proposes sweeping changes that could disrupt the current status quo in the retirement industry, increase the attractiveness in having a retirement plan for small employers, and result in an archetype shift for the advisers and recordkeeping providers who serve them. There are two potential pathways for the broad adoption of open multiple employer plans by small businesses, one driven by advisers and the other by recordkeepers.

Source: Planadviser.com, April 2019

Open MEPs Will Be a Retirement Plan Market Disruptor

Abstract: If legislation allowing for open multiple employer plans (MEPs) is passed, it will be a while before implementation, and changes it will bring will affect services and business models of nearly every stakeholder in the retirement plan industry.

Source: Plansponsor.com, February 2019

Open Questions on Open MEPs

Abstract: One of the shiny new coins of the 401k realm is "Open MEPs." It's anticipated that Congress will pass legislation this year that permits Open MEPs. Legislation is needed because of DOL guidance that, in essence, prohibits MEPs that are "open" to all employers. But what is an Open Multiple Employer Plan? What other kinds of MEPs are there? How do the people that set up MEPs get paid?

Source: Fredreish.com, January 2019

DOL Rule to Expand MEPs: A Positive Step, but Broader Savings Options Needed

Abstract: The Department of Labor is considering new rules to facilitate retirement saving in workplace retirement accounts for sole proprietors and the owners and workers of small businesses. While these rules are a small step in the right direction, Congress must simplify saving for retirement and other needs for all Americans. Congress and the Administration should work together to simplify saving for all Americans. Universal Savings Accounts should be first on their agenda.

Source: Heritage.org, January 2019

Why Current 401k MEP Mania Should Cool

Abstract: Legislative changes are necessary in order to expand savings options even more. While MEPs are a step in the right direction, but MEP expansions are merely tweaking the edges of an overly complex retirement system in need of fundamental congressional reform. MEPs could even risk entrenching the current broken system.

Source: 401kspecialistmag.com, January 2019

Why MEPs Aren't Right for All 401k Plan Sponsors

Abstract: Multiple-employer plans, or MEPs, are all the rage these days. However, there are some restrictions around MEPs, namely that they provide a one-size-fits-all solution in a world where customization has become king. For that reason, there has been a movement toward the de-adoption of MEPs that is not only very real, but also sheds light on why MEPs are a good option for some plans and a poor fit for others.

Source: Investmentnews.com (registration may be required), January 2019

Closing the Retirement Savings Coverage Gap - Multiple Employer Plans

Abstract: The retirement coverage gap can and should be narrowed. While a variety of solutions are possible, there is a growing consensus in Washington that one of the broadest and most expedient ways would be to expand access to multiple employer plans, or MEPs, for small employers and their employees. This 12-page paper outlines the legislative and regulatory actions that would be needed to broaden access to MEPs. It also describes the features that a model MEP might incorporate.

Source: Prudential.com, December 2018

The DOL's Own Reasoning Supports MEPs Being "Open"

Abstract: TAG Resources' comment to the proposed MEP regulation which was filed with the DOL last week. The comment letter addresses the DOL's main concern in initially prohibiting non-PEO commercial enterprises from becoming MEP sponsors.

Source: Businessofbenefits.com, December 2018

Combining Small 401k Accounts Helps Preserve Retirement Saving

Abstract: The Department of Labor, with its request for public comment, may be about to give Retirement Clearinghouse LLC the green light to proceed with its proposal to automatically transfer small balances from one 401k to another. Such an arrangement would dramatically reduce leakages from 401k plans.

Source: Marketwatch.com, December 2018

Open MEPs: A Promising Way to Close the Coverage Gap

Abstract: Employers play a substantial role in helping employees prepare for retirement. Yet small businesses state that cost and other administrative concerns limit their ability to offer their employees access to a workplace retirement plan. This 12-page white paper suggests that open multiple employer plans (MEPs) offer a solution, allowing small businesses to band together under one workplace plan.

Source: Empower-Retirement.com, December 2018

DOL Set to Give 401k Advisers' Businesses a Boost

Abstract: The Department of Labor is expanding what retirement plan advisers can offer small-business clients courtesy of new rules the agency proposed around multiple-employer plans. Labor's proposed rules on multiple-employer plans would let advisers aggregate clients in a single retirement plan.

Source: Investmentnews.com (registration may be required), December 2018

Will the DOL's MEP Proposal Make Meps Available to You?

Abstract: The key legal issue here is that plans, including MEPs, must be adopted by an employer of employees covered under the plan. Up to now, the Department of Labor defined "employer" narrowly to preclude unrelated employers from adopting single plan MEPs. Unfortunately, these eagerly awaited regulations did not authorize the kind of MEP many wanted.

Source: 401ktv.com, November 2018

DOL Proposes New Multiple Employer Plan Rules: Everything You Need to Know

Abstract: The MEP proposal would allow certain small businesses to band together to offer more robust 401k plans to their employees and achieve significant savings. While the new regulation is certainly a step in the direction, it doesn't go as far as many had hoped. Thus, the future of open MEPs lies in the hands of a Congress that seems to be at a clear impasse going into the midterms.

Source: Lockton.com, November 2018

Regulation Moves to Expand Multi-Employer Plans

Abstract: President Trump issued an executive order in August directing the DOL to examine policies that expand the circumstances where employers, especially small- and mid-sized businesses, may sponsor or adopt a multi-employer plan as a workplace retirement savings option, subject to appropriate safeguards. In response, the DOL issued a proposed regulation on October 23 that clarifies who can sponsor or adopt an MEP. The regulation is meant to expand the use of open multiple employer plans, allowing different businesses to join an MEP.

Source: Callan.com, November 2018

Open MEP Opportunities: A Look at the Compliance Challenges, as Well

Abstract: The success of these plans will largely depend on the nature of the guidance issued by the DOL at the president's direction or that of any legislation enacted by Congress. Advisers likely will have the opportunity to sponsor open MEPs and make them available to their small business clients; they also likely will be subject to ERISA, to at least some extent.

Source: Groom.com, November 2018

Proposed Multiple Employer DC Plan Rules Could Affect Co-Employers of Leased Employees

Abstract: Employers of all sizes that provide retirement plan coverage for all or a portion of their workforce through an association or leasing organization may benefit from new options presented by proposed DOL regulations. The proposal would simplify Form 5500 filing requirements and clarify fiduciary responsibilities.

Source: Buckglobal.com, November 2018

The Labor Department's Proposal for Multiple-Employer Plans Is Limited

Abstract: The proposal isn't comprehensive enough to create sweeping changes. But, it may induce a few more entities to offer MEPs, possibly increasing retirement coverage and perhaps improving the quality of the retirement plans for some small businesses. The most significant impact of this proposal might be that it gives professional employer organizations a leg up in offering MEPs and might encourage more employers to join such organizations.

Source: Morningstar.com, November 2018

Closer Examination of DOL MEP Proposal

Abstract: Those industry stakeholders disappointed by the limited scope of the proposed regulations can take heart in the fact that DOL staff calls for detailed commentary on ways the proposal could be expanded, including into the area of "open MEPs" and "corporate MEPs."

Source: Planadviser.com, October 2018

The New Proposed MEP Regulations - Meh!

Abstract: The Department of Labor issued proposed regulations on October 22, 2018, that represent the first major step in changing its restrictions on multiple employer plans. However, it is just the first step, and does not change the landscape for Open MEPs. The first part of the article gives a general description of what the proposal does and the second part takes a "deeper dive."

Source: Ferenczylaw.com, October 2018

DOL Proposes Eased Restrictions on Open Multiple-Employer Plans for Small Businesses

Abstract: Under the proposed DOL rule, MEPs could be created by associations of employers in various cities, counties, states, or regions or nationwide across an industry. The proposal states that such groups will now qualify as "employers" under the terms of ERISA for the purpose of setting up an individual employee pension plan.

Source: Blr.com, October 2018

DOL Issues Proposed Regulations on Association Retirement Plans

Abstract: The Department of Labor has issued proposed regulations clarifying the definition of "employer" under Section 3(5) of the Employee Retirement Income Security Act of 1974 (ERISA) for purposes of multiple employer plans (MEPs), also referred to as association retirement plans in the proposal.

Source: Westlaw.com, October 2018

DOL Issues Regulations Regarding Multiple Employer Pension Plans

Abstract: While there are generally four types of MEPs, the proposal modifies the rules for so-called "closed" MEPs and clarifies rules with respect to MEPs sponsored by a professional employer organization. The proposed regulations provide that a bona fide group or association of employers and bona fide PEOs are deemed to be acting in the interests of an employer, and thus, can establish a pension plan so long as they satisfy the DOL's regulatory requirements.

Source: Wagnerlawgroup.com, October 2018

Much Ado About Nothing: DOL Issues New MEP Guidance

Abstract: The proposed rules that the DOL just published offered pretty much nothing. While it offered more guidance on how associations and professional employer organizations could sponsor MEPs, it did nothing with its restriction on requiring commonality among adopting employers. So the door for Open MEPs remains closed.

Source: Jdsupra.com, October 2018

DOL Proposes Regulations to Expand Access to MEPs

Abstract: The DOL has issued proposed regulations that would interpret ERISA's definition of "employer" to allow certain groups or associations of employers, and certain professional employer organizations, to establish multiple employer defined contribution retirement plans. The proposed regulations would permit MEPs to be established and maintained by "a bona fide group or association of employers" or "a bona fide professional employer organization." The proposed regulations also address MEP participation by certain working owners who have no employees.

Source: Thomsonreuters.com, October 2018

DOL Releases Proposed Rule on MEPs

Abstract: Following a directive from President Donald Trump, the Labor Department announced a proposed rule making designed to make it easier for small businesses to offer retirement savings plans to their workers through association retirement plans, often referred to as multiple-employer plans, or MEPs.

Source: Thinkadvisor.com, October 2018

DOL Proposes to Relax Multiple Employer Plan Rules

Abstract: Historically, the DOL tried to limit the circumstances under which groups of employers could safely access the advantages of participating in a MEP. The proposed regulations clarify that employers may band together into employer groups or professional employer organizations to sponsor a retirement plan if they meet certain requirements.

Source: Sgrlaw.com, October 2018

DOL Proposes Multiple Employer Plan Expansion

Abstract: The proposed regulation provides clarity regarding the types of "bona fide" groups or associations of employers and professional employer organizations that are permitted to sponsor MEPs. The proposed regulation is similar in many material respects to the DOL's recently finalized Association Health Plan regulation. This article reviews the proposed regulations and provides detail analysis.

Source: Groom.com, October 2018

DOL Seeks to Expand Access to Open MEPs, or "Association Retirement Plans"

Abstract: The DOL has published a set of proposed regulations under Title 29 of the Code of Federal Regulations to expand access to retirement saving options by clarifying the circumstances under which an employer group, association, or professional employer organization may sponsor a workplace retirement plan. These plans allow small businesses to join together to offer defined contribution retirement savings benefits.

Source: Planadviser.com, October 2018

DOL Proposes Expanded Access to MEPs

Abstract: The Department of Labor has released proposed rules that would expand access to multiple employer retirement plans for small employers and self-employed workers, while also maintaining fiduciary oversight.

Source: Napa-net.org, October 2018

DOL Releases Proposed Rules on MEPs

Abstract: The proposed rule would make it easier for small businesses to offer retirement savings plans to their workers through Association Retirement Plans, which would allow small businesses to band together to offer 401k plans to their employees.

Source: 401khelpcenter.com, October 2018

OMB Finishes Review of DOL Proposal to Establish Open MEPs

Abstract: The text of the regulation is still forthcoming, but the Office of Management and Budget has completed its review; so far, we know the regulation is viewed as "major" and "economically significant."

Source: Planadviser.com, October 2018

Multiple Employer Plans Could Change Retirement

Abstract: Multiple Employer Plans are making a comeback as regulators and legislators are focusing on methods for having more Americans gain access to retirement savings plans. While multiple employer plans can help to make life easier for smaller employers who want to offer a 401k plan by allowing them to offload responsibilities, they have disadvantages as well as advantages.

Source: 401ktv.com, October 2018

What's Next for 401k MEPs?

Abstract: The president's executive order put multiple employer plans front-and-center. Pentegra's Pete Swisher fills us in on what happens now.

Source: 401kspecialistmag.com, October 2018

Open MEPs Could Create Many Opportunities for Advisers

Abstract: Should Congress or federal regulators eliminate the common nexus and bad apple rules that have held back open multiple employer plans, experts anticipate many more small businesses will jump in.

Source: Planadviser.com, October 2018

DOL on Verge of Issuing MEP Guidance

Abstract: The DOL is set to formally propose a rule seeking to expand access to workplace retirement plans, less than a month after President Donald J. Trump issued an executive order calling on the agency to do so. The DOL just dropped off a proposed rule to the Office of Management and Budget.

Source: Jdsupra.com, October 2018

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