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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.

If you find a broken link or an items that you feel is outdate, irrelevant or no longer appropriate, please let us know.

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PEPs Pique Small Businesses' Interest, But Hurdles Remain

A new survey finds that small employers are interested in learning more about pooled employer plans, although there is still some hesitancy on the road to implementation. More than half of smaller employers surveyed by the Secure Retirement Institute that are considering a DC plan are interested in learning more about PEPs, regardless of whether they have a retirement plan currently in place.

Source: Napa-net.org, May 2022

Putting a Little PEP in a 401k Retirement Plan

Set against the backdrop of the continuing wave of ERISA litigation that is being brought against employers who sponsor retirement plans, Pooled Employer Plans ("PEPs") are emerging in the marketplace as an alternative that may limit employers' risk of retirement plan-related litigation. There have been over 220 ERISA class action suits filed in connection with retirement plans since 2018, and the top ten ERISA settlements for 2021 alone totaled $840 million in the aggregate. Since ERISA litigation is a serious and relevant concern, many plan sponsors, including private equity sponsors and their portfolio companies, would benefit from evaluating whether a PEP is a viable retirement plan solution for them.

Source: Ropesgray.com, April 2022

IRS Issues Proposed MEP Rule

The IRS has released a new proposed rule providing for an exception, if certain requirements are met, to the application of the "unified plan rule" for multiple employer plans when there is a failure by one or more participating employers to take actions necessary to satisfy requirements of the Internal Revenue Code. The unified plan rule specifies that the failure by one participating employer to satisfy an applicable qualification requirement would result in the disqualification of the MEP for all employers maintaining the plan.

Source: Ascensus.com, March 2022

Is a PEP Right for You?

More employees need to be able to contribute to retirement plans, and many employers without plans would like to offer 401k plans to their employees. This article discusses a new option for outsourcing fiduciary responsibility and why more employers should consider PEPs.

Source: Rpaconvergence.com, January 2022

Pros and Cons of Pooled Employer Plans

The SECURE Act created a new type of defined contribution multiple employer plan, the pooled employer plan. Unlike previous versions of multiple employer plans, it need not be limited to employers sharing a nexus or interest or located in the same geographical area. Moreover, the plan as a whole is protected from disqualification due to the non-compliance of a participating employer, as long as the plan provides a mechanism for expelling a chronically non-compliant employer and holding such employer responsible for its noncompliance. As a result, pooled employer plans may be an attractive option for some employers.

Source: Venable.com, August 2021

PEPs Are Here. But How Successful Will They Be?

The case for pooled employer plans is compelling, especially to address the fact that there are 5 million to 6 million companies in the U.S. and just 650,000 DC plans. But as we wait for the DC market to adopt PEPs, the results so far have been muted. A few vendors have applied to be pooled plan providers, but not in the numbers many predicted.

Source: Investmentnews.com (registration may be required), July 2021

The SECURE Act Acronym Plans: PEPs, MEPs, and GoPs

The SECURE Act sought to broaden retirement plan coverage for American workers. With many of the provisions only now taking effect, the question turns to whether the newly established and expanded plan types -- pooled employer plans (PEPs), group of plans (GoPs), and multiple employer plans (MEPs) -- will live up to the hype.

Source: Captrust.com, May 2021

As MEPs Grow, ERISA Lawsuits Rise With Them

As companies seek efficiency, lower cost, and reduced fiduciary headaches by joining a multiple-employer plan, the MEP providers are encountering the same ERISA challenges to their 401k or 403b plans as those faced by single-employer sponsors. Allegations range from excessive investment fees to poorly performing investments to inadequate monitoring of administrative costs.

Source: Pionline.com, May 2021

Pooled Employer Plans: Employer Considerations

This article reviews some of the considerations employers may need to address when trying to decide whether to participate in a particular PEP. There will be many PEPs available in the market from which to choose; thus, employers will need to look to a PPP's and/or a PEP's marketing or other materials for more detailed information. But, there is some essential information employers seek and consider.

Source: Actuary.org, May 2021

What Is a Pooled Employer Plan?

A PEP is a new type of retirement plan that was created by the Setting Every Community Up for Retirement Enhancement Act (SECURE) Act. A PEP allows plan sponsors to pool their retirement resources with the resources of other employers, as well as delegate many plan operations and fiduciary responsibilities to a third party. Download a free FAQ.

Source: Multnomahgroup.com, April 2021

Multiple Employer Plans: Fiduciary Litigation Risk?

As MEP solutions begin to accumulate participants and assets, plaintiffs' lawyers will inevitably train their sights on MEPs as a fiduciary litigation target. Indeed, they have already begun to do so.

Source: Napa-net.org, April 2021

Pooled Employer Plans: The Benefits and Considerations for Employers

The SECURE Act introduced an entirely new retirement plan fiduciary structure called the Pooled Employer Plan. PEPs allow unrelated employers to pool resources to help achieve economies of scale and administrative efficiencies. As with any retirement plan strategy, PEPs come with benefits, limitations, and risks that should all factor into an employer's decision to join. This is a review of the benefits, limitations, and risks.

Source: Lockton.com, April 2021

Wave of PEPs Hits the Market

Pooled employer plans are coming to market at a clip, three months after the first ones were given the DOL's blessing. In the past week alone, at least three pooled employer plans, or PEPs, have been announced. Those include plans from American Trust, Access Retirement Solutions, and a new entity from venture capital firm Magis Capital Partners, Sallus Retirement.

Source: Investmentnews.com (registration may be required), April 2021

Yet Another MEP Targeted by Excessive Fee Suit

The law firm of Capozzi Adler, P.C. has found another 401k plan to sue, and this one a multiple employer plan. The plan -- more specifically the plan fiduciaries -- targeted are those of Nextep, Inc., a Professional Employer Organization, as well as the firm's board of directors, the investment committee, and members of that committee.

Source: Asppa.org, March 2021

Another MEP Targeted in Excessive Fee Suit

The platform may be different, but the excessive fee allegations directed toward a multiple employer plan are all too familiar. The plaintiff this time was employed by Heartland Coca-Cola Bottling Company an employer that participated in the Coca-Cola Bottlers' Association 401k Retirement Savings Plan, a multiple employer plan. The plan covers about 19,000 participants, and as of December 2019 had nearly $800 million in assets spread across 24 investment options, including a Coca-Cola Common Stock Fund.

Source: Napa-net.org, February 2021

DOL Proffers Final Regulations for Pooled Plan Providers

The DOL has issued final regulations on registration requirements for pooled plan providers administering pooled employer plans. The final regulations retain much of the same structure as the proposed rule issued last August, with some added clarification on registration requirements.

Source: Hallbenefitslaw.com, February 2021

IRS Signals Compatibility of Pre-Approved Plan Documents and PEPs

The IRS in its January 20, 2021 edition of Employee Plans News has revealed that pre-approved qualified retirement plan documents may be used to establish arrangements known as pooled employer plans, or PEPs.

Source: Ascensus.com, January 2021

The Mechanics of Moving to a PEP

The goal of the provisions of the SECURE Act that created pooled employer plans was to encourage employers that didn't have retirement plans for employees to offer one. But employers that already sponsor a plan may also decide a PEP is a better choice for them and their participants. With a lack of regulatory guidance, plan sponsors can rely on certain existing rules to know the steps to take if they decide to move from a single-employer plan to a pooled employer plan.

Source: Plansponsor.com, January 2021

The Risks Recordkeepers See With PEPs

The forthcoming plans present challenges and opportunities. Retirement plan recordkeepers see some promise in pooled employer plans, but they also anticipate even more risk to their businesses, regardless of whether they provide them.

Source: Investmentnews.com (registration may be required), January 2021

The New Pooled Employer 401k Plan and the Hazards of Advisor-Led PEPs

Ultimately, while the PEP may become a valuable tool for small business owners to be able to offer employees competitive retirement plan options, RIAs will need to carefully consider whether to choose to take on the role of a PPP for their small business clients plans and the associated ramifications if they do choose to do so. Including asking the question of whether branching out into plan administration would result in more business anyway, or if it will be better to find a third-party administrator to partner with instead?

Source: Kitces.com, December 2020

Bill to Expand MEPs to 403bs Introduced in Senate

A bipartisan trio of U.S. Senators has introduced legislation that would expand Multiple Employer Plan access to 403b plans, along with other MEP enhancements.

Source: Asppa.org, December 2020

Pooled vs. Single-Employer 401k Plans - Are PEPs for You?

Supporters claim PEPs can offer lower fees for retirement savers and greater liability protection for business owners than a single-employer 401k plan. If you're a business owner, you should understand the differences between PEPs and SEPs to make the best choice for your company.

Source: Employeefiduciary.com, December 2020

DOL Issues Proposed Regulations on Pooled Plan Providers

Pooled Employer Plans must be administered by a Pooled Plan Provider, which must register with the Department of Labor before commencing operations. On August 20, 2020, the DOL issued a proposed rule regarding the registration process for PPPs which is reviewed here.

Source: Hallbenefitslaw.com, December 2020

Pooled Employer Plans Glossary

Pooled Employer Plans become a real thing as of the first of the year, though there is still a lack of guidance related to them. Many of you may now be pressed on the question of whether or not you or your clients should choose this road. This glossary should help you in your assessment of these arrangements.

Source: Businessofbenefits.com, December 2020

DOL Issues Key Rule for Pooled Employer Plans

The Department of Labor's final rule on registration requirements for pooled plan providers, or PPPs, takes effect this month. Notably, the final version of the rule extends a waiver for PPP applicants between Nov. 25 and Jan. 31, allowing them to forgo the normal 30-day period between filing and beginning a PEP.

Source: Investmentnews.com (registration may be required), November 2020

Service Provider Considerations on MEPs and PEPs

There can be some reticence to offer a MEP until we have really firm guidance. Some are waiting to see what happens with all the rules. This is important so you know what you're supposed to be doing from a practical standpoint and a process standpoint.

Source: Asppa.org, November 2020

DOL Announces 401k PEP Registration Requirements

The Department of Labor announced a final rule establishing registration requirements for pooled plan providers. The rule implements the registration requirements for pooled plan providers pursuant to the SECURE Act.

Source: 401kspecialistmag.com, November 2020

PEPs Carry Evolving Fiduciary Risks of Their Own

Among its many popular provisions, the SECURE Act amended ERISA to allow for pooled employer plans, referred to as "PEPs." Even so, the legal complexities that emerge when a single employer operates a retirement plan for its workforce are already immense and the same will certainly be true when it comes to building pooled employer plans.

Source: Plansponsor.com, November 2020

Bill Would Let 403bs Use PEPs

Nonprofits and colleges would able to join the SECURE Act's much-anticipated pooled employer plans under a bill introduced last week by Rep. Ron Kind. If the bill passes, it will be very big news for any business that is lining up to become a pooled plan provider. There is expected to be a flood of applications for that status, once the DOL finalizes its criteria for those plan providers.

Source: Investmentnews.com (registration may be required), October 2020

Pooled Employer Plans and 3(38) Fiduciary Advisers

One provider getting ready to launch a SECURE Act-enabled pooled employer plan on January 1 says he is already in conversation with advisers about combining 3(38) fiduciary oversight with PEP recordkeeping and administration.

Source: Planadviser.com, October 2020

TriNet Sued Over MEPs

Human resources outsourcing firm TriNet is among the latest companies to be targeted over the multiple-employer plans it sponsors, having been sued last week by several participants. The Sept. 29 class-action complaint was brought by law firm Capozzi Adler, which this year has filed by far the most new 401k excessive-fee lawsuits. The case against TriNet is different, however, because it involves MEPs rather than a single-employer 401k plan.

Source: Investmentnews.com (registration may be required), October 2020

Are MEPs the Next Big Target for Lawsuits?

At least three cases were filed recently against providers of multiple employer plans, and two other cases have been settled. This year also has seen a wild rise in the number of 401k lawsuits, though relatively few of them have involved MEPs.

Source: Investmentnews.com (registration may be required), October 2020

Pooled Employer Plans: Where Do We Stand?

The IRS and DOL have not issued much-needed comprehensive guidance on PEPs. With such a short time before the rules become effective, practitioners are worried that we may not have timely guidance to make decisions regarding the addition of PEP services to their businesses. This is a two-page overview of what we currently know.

Source: Asc-net.com, September 2020

Schlichter Targets Another MEP

The law firm of Schlichter Bogard & Denton has a new target, multiple employer plans. They've just filed their second excessive fee suit in that genre. This time the target is the Pentegra Defined Contribution Plan for Financial Institutions, a multiple employer plan, or MEP.

Source: Napa-net.org, September 2020

DOL Proposed Pooled Plan Provider Registration Rule

The SECURE Act created a new structure through which completely unrelated employers can participate in a single defined contribution plan beginning on January 1, 2021. These Pooled Employer Plans must have a Pooled Plan Provider, and each PPP must register with the Department of Labor prior to beginning operations. On August 20, 2020, DOL released a proposed regulation detailing the PPP registration requirements.

Source: Groom.com, August 2020

Proposed Regulations Issued on Pooled Plan Provider Registration

The DOL has issued highly-anticipated proposed regulations on registration requirements for entities that will function as "pooled plan providers" for retirement plans that will be known as pooled employer plans, or PEPs.

Source: Futureplan.com, August 2020

Will PEPs Address the Retirement Plan Woes of Small Employers?

One downfall of our retirement saving system is the cost and quality of the plan that you have access to can be significantly dependent on the size of your employer. Small employers have fewer employees to join their plans and generally fewer collective assets to invest, resulting in limited bargaining power to negotiate low fees and barriers to accessing low-cost investment options that may have higher minimum investments. As the debut of pooled employer plans draws near, the current MEP system provides a useful test case for what can go right and wrong.

Source: Morningstar.com, July 2020

Attorneys Offer Closer Reading of DOL's Open MEP RFI

Advisers and broker/dealers hoping to work with open multiple employer plans now have a short window to offer their perspectives to the DOL and the IRS. Attorneys with the Wagner Law Group note that the RFI also requests information on issues facing two other types of multiple employer plans, multiple employer plans sponsored by employer groups or associations with "commonality of interest," dubbed "association plans," and those sponsored by professional employer organizations, dubbed "PEO MEPs." Together, the DOL refers to these two plan types as "MEPs."

Source: Planadviser.com, July 2020

DOL Asks for Suggestions on MEP and PEP Guidance

A key component of the SECURE Act, passed at the end of 2019, was the expansion of opportunities to combine the 401k plan assets of multiple unrelated employers. The SECURE Act relaxed the rules on multiple employer plans and created a new vehicle, the pooled employer plan to allow employers to come together under a single 401k plan. By providing additional pooling opportunities, Congress hoped to allow smaller employers to enjoy economies of scale available only to very large employers, and thereby reduce participant fees and enhance services. The DOL is now looking for suggestions on what guidance may help create additional MEP and PEP opportunities.

Source: Beneficiallyyours.com, June 2020

Are Two Employers Better than One? An Empirical Assessment of Multiple-Employer Retirement Plans

This Article shows that the bipartisan enthusiasm for expanding multiple-employer arrangements rests on shaky theoretical and empirical considerations. Drawing on newly hand-collected data for multiple-employer plans in effect before 2019, it argues that overlooked agency costs, market opacity, and the limits of the fiduciary governance regime have undermined the gains from asset pooling and centralized plan administration in existing multiple-employer plans.

Source: Ssrn.com, June 2020

Do MEPs Really Reduce Fees?

MEPs loom as the elephant in the retirement industry room. With the SECURE Act allowing open Multiple-Employer Retirement Plans beginning in January of 2021, service providers cannot ignore this beast. It has the potential to become a behemoth, swallowing existing business models. An academic conclusion, like any credible science, must be careful with its words. Some may view this as hedging, but a scientist would call this exacting. It not surprising then that several academic paper's conclusions offered a mixed review of the 401k MEP.

Source: Fiduciarynews.com, June 2020

MEPs Costlier Than Similarly Sized 401ks: Study

Multiple-employer plans have been hailed as a cure for the lack of access that at least a third of U.S. workers have to workplace retirement plans, but a recent academic paper highlights the glaringly outsize fees some MEPs charge. The most recent data available from the Department of Labor, for the year 2016, show that MEPs carried higher administrative fees on average than similarly sized plans sponsored by individual employers, according to the paper, written by Natalya Shnitser, assistant professor at Boston College Law School.

Source: Investmentnews.com (registration may be required), May 2020

ADP Multiple Employer Plan Facing Excessive Fee Lawsuit

The lawsuit alleges the ADP defendants "have allowed unreasonable recordkeeping/administrative expenses to be charged to the plan; failed to adequately monitor the plan's recordkeeper and its affiliates, who the ADP defendants have permitted to design an investment menu unreasonably favorable to them despite the recordkeeper's clear conflicts of interest; and, along with NFP Retirement, selected, retained, and/or otherwise ratified high-cost and poorly-performing investments, when more prudent alternative investments were available."

Source: Planadviser.com, May 2020

ADP MEP Tapped in Excessive Fee Suit

A new excessive fee suit has been filed, one that purports to represent a class of some 5,000 employers participating in a multiple employer plan, or MEP. The suit was filed in the U.S. District Court for the District of New Jersey by McCaffree Financial Corp., individually as a participating employer co-sponsor and a fiduciary of the ADP TotalSource Retirement Savings Plan.

Source: Napa-net.org, May 2020

RFP Guide for Selecting DC Plan Service Providers for Association Retirement Plans

The SPARK developed this tool for preparing and evaluating Requests for Proposal for Association Retirement Plans, which are a special type of defined contribution plan, to assist Associations and advisors/consultants in this important task. While the use of this tool is completely voluntary, the Society is encouraging widespread use of this tool to enable service providers to prepare consistent responses, resulting in reduced response time and improved evaluations.

Source: Sparkinstitute.org, April 2020

Unscrambling PEPs, MEPs and GoPs

The Pooled Employer Plan and Multiple Employer Plan provisions are some of the most hyped elements of the SECURE Act. PEPs and MEPs are new plan structures that allow employees of more than one employer to participate in a single retirement plan, with the goal of expanding retirement plan access for all individuals. This is a quick review of what these plans are.

Source: Cammackretirement.com, February 2020

Are PEPs Available to 403b Plan Sponsors?

Are PEPs available to 403bs? The new PEP rules, do not apply to 403b plans. Thus small 403b plans are still somewhat limited in their opportunities to band together into a single plan to increase their purchasing power.

Source: Plansponsor.com, February 2020

Open 401k MEPs: Not Just for Smaller, "Planless" Employers

When passage of the SECURE Act in late December opened the door for unrelated small and medium-sized employers to band together to offer a Multiple Employer Plan, the idea behind it was to expand the availability of employer-sponsored retirement plans to more workers at small businesses. New Secure Retirement Institute study finds even larger employers showing interest in exploring benefits of Open Multiple Employer Plans.

Source: 401kspecialistmag.com, February 2020

Consider the PEP, a New SECURE Act 401k Option

A PEP or Pooled Employer Plan is a new way, created by the SECURE Act, for unrelated employers to collectively participate in a defined contribution plan which is professionally run, and because of economies of scale, could charge lower fees than "traditional" plans. While PEPs aren't the right fit for every plan sponsor, they promise to be a major development in the pension plan market.

Source: Jdsupra.com, February 2020

A Valid MEP/PEP Assessment Requires Inclusion of the "Group of Plans"

The one SECURE Act topic which seems to be on the forefront of a significant number of professionals is the attempt to make sense of the new MEP and PEP rules. Commentators seem to be taking a common misstep in that (with rare exception) each of these analyses are missing the assessment of the use of the "Group of Plans,"or "GoP," in relation to MEPs and PEPs.

Source: Businessofbenefits.com, February 2020

More MEP Guidance to Come About SECURE Act Provisions

Bradford P. Campbell, with Drinker Biddle, recently discussed specific requirements for open MEPs, now called pooled employer plans, included in the SECURE Act. There are still some unanswered questions and guidance that needs to be released and Campbell expects the DOL will provide that guidance.

Source: Planadviser.com, January 2020

How Open MEPs Could Hit 401ks, Advisers

Open multiple employer plans have the potential to shake up the 401k industry, and banks and insurance companies stand to benefit from the disruption. As such plans begin to emerge in the wake of the SECURE Act's passage, they could consume some of the assets that would otherwise flow into traditional employer-sponsored plans. But the plans will also present an enormous opportunity for financial advisers who have some level of retirement plan business.

Source: Investmentnews.com (registration may be required), January 2020

Despite SECURE ACT, Some 401k MEPs Challenges Remain

The SECURE Act has answered many of the questions of 401k MEP proponents. Here, attorney Ary Rosenbaum is interviewed about the main points addressed by this new legislation, where there were concerns, and to what extent the SECURE Act alleviates those concerns.

Source: Fiduciarynews.com, January 2020

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

The 5-page article discusses how federal regulators and lawmakers have been moving toward making plans more attractive for small business by expanding the "multiple employer plan."

Source: Steptoe.com, January 2020

Could Multiple-Employer Plans Be a Game Changer for Retirement Security?

Open MEPs are an exciting policy change, but it is far from clear how they will work in practice. Their effectiveness in improving retirement-plan quality and their overall appeal depends on how this niche industry reacts. There is also the matter of how regulators nudge MEPs along, as they will have to balance concerns regarding the soundness and proper regulation of these plans with maintaining their appeal to the industry for use and promotion. This article discusses a few questions employers and plan sponsors may have around open MEPs.

Source: Morningstar.com, December 2019

DOL Issues Guidance on Association Multiple Employer Plans

New regulations from the Department of Labor regarding Multiple Employer Plans are set to take effect later this year. Specifically, they outline three different types of MEPs and how the DOL will look at the unrelated businesses banding together to form the MEP. In particular, Association MEPs (also called Association Retirement Plans) are of interest to many employers, as they arise for a "bona fide group or association" of employers.

Source: Hallbenefitslaw.com, November 2019

How to Address Top Fiduciary Issues for Trade Associations Sponsoring 401k MEPs

It appears all but certain the floodgates will soon open wide, unleashing a torrent of trade association sponsored 401k MEPs. Even with the DOL's final rules, not all the fiduciary risks for associations starting a 401k MEP plan have been eliminated.

Source: Fiduciarynews.com, November 2019

Four Things to Factor in When Considering an Open MEP

Proponents of open MEPs hail them as a means of reducing both the burden and cost of sponsoring a retirement plan for smaller employers, but as MassMutual explains in its white paper, these benefits may prove elusive depending upon the specific needs and preferences of the participating employer and the plan options selected.

Source: Asppa.org, November 2019

Expanding Retirement Plan Coverage Through Association Retirement Plans

In an effort to expand retirement plan coverage to more Americans, the DOL recently finalized a regulation that should simplify the administrative burdens, and thereby reduce costs, for sponsoring and maintaining a defined contribution retirement plan for smaller employers. Under the Regulation, smaller employers, including "working owners," can band together to participate in defined contribution multiple employer plans, sometimes referred to by the DOL as "association retirement plans."

Source: Troutman.com, October 2019

IRS Announces Public Hearing on Proposed MEP Rules

The IRS and Treasury have issued a notice of public hearing on proposed regulations relating to the tax qualification of plans maintained by more than one employer, often referred to as multiple employer plans (MEPs). The public hearing is being held on Wednesday, December 11, at 10:00 a.m.

Source: Planadviser.com, October 2019

Multiple Changes for Multiple Employer Plans

While the SECURE Act and its promise of truly open multiple employer plans (MEPs) sat with the Senate this summer, the US Department of Labor and Internal Revenue Service both issued guidance addressing MEPs. These regulations help alleviate some of the uncertainty and risk that have made MEPs unpopular in recent years, but a number of questions remain unanswered.

Source: Morganlewis.com, October 2019

Open or Closed: What 401k MEP Choice Should Your Employer Make?

Employers may want to tread carefully before jumping onto the MEP bandwagon. It turns out there are two flavors of MEP: "open" and "closed." Employers need to both understand the difference between these choices as well as how those differences might impact their specific situation. In some ways, open MEPs may be problematic for employers seeking the maximum benefits presented by these pooling vehicles. Closed MEPs do not have these problems.

Source: Forbes.com, October 2019

Company Fiduciary Must Ask These Questions Before Joining a 401k MEP

September 30, 2019 may very well be remembered as the first day of a brand-new era. In July, the DOL finalized its rule which redefined "Employer" under Section 3(5) of ERISA. While not opening up the 401k MEP concept to all, the new regulation makes it clear that closed MEPs will have the advantages they notionally should have. Current 401k plan sponsors, however, may want to consider asking these questions before joining an association 401k MEP.

Source: Fiduciarynews.com, October 2019

Will 2019 Be the Year of the Multiple Employer Plan (MEP)?

Expanding access to MEPs is being advocated as a significant opportunity to expand access to retirement plans, especially for employees of small businesses. This paper explores the features of MEPs today as compared to traditional single employer plans, then analyzes the potential impact opening MEPs up to more plans could have on the retirement savings landscape.

Source: Broadridge.com, October 2019

MEPmentum Continues: DOL Issues Guidance on 'Open' MEPs

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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"

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

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

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

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

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

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

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

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

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

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

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

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"

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

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

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

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?

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

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

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

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

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

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

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!

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

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

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

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

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

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

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

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

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"

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

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

OMB Finishes Review of DOL Proposal to Establish Open MEPs

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

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?

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

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

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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