There has been considerable attention in the last few years in Washington, D.C. – by Congress, the President, and the IRS and U.S. Department of Labor (DOL) – focused on the pros and cons of multiple employer retirement plans, commonly referred to as MEPs. The concept is that many employers, especially small employers, may be able to come together to collectively maintain a 401(k) plan or similar retirement plan . . . and in so doing, leverage the headcount and dollars in the plan to get pricing and services similar to that which large plans receive.
While others in D.C. have strongly promoted the elimination of barriers to the establishment of MEPs, the DOL has been consistent in the last several years in narrowly interpreting the circumstances under which MEPs are legal under the laws and regulations enforced by the DOL. Pursuant to direction from President Trump late last year, the DOL provided proposed regulations which, in theory, loosen the restrictions. To the contrary, in my opinion, the DOL has not moved much closer to those who want to move “full steam ahead” into the MEP world.
Attached is an excerpt from a recent seminar outline by Attorney John Utz. Although I have not worked with John, I think his analysis is well done and must-reading for anyone trying to understand the DOL position on MEPs.Multiple-Employer-Retirement-Plans-A-Petite-Primer (PDF)