Maintaining a company retirement plan takes time and patience and carries a great deal of fiduciary risk. With the Multiple Employer Plan 401(k), you can reduce your burden and achieve economies of scale in retirement plan pricing for your company. In addition to saving money on fees, a Multiple Employer Plan gives business owners and HR professionals more time to focus on your other business needs.

A Multiple Employer Plan (also called “MEP”) is a tax-qualified retirement plan sponsored by more than one unrelated employer. In July 2019, the Department of Labor (DOL) issued new rules which will make it easier for employers to join an MEP. 

The Multiple Employer Plan (MEP) at McClure Wealth is what is referred to as an “Open MEP”, where there is more than one unrelated employer. Each participating employer must maintain their own 5500, obtain a separate audit (if needed), and ERISA bond. This is different from “Closed MEPs” which require a “commonality of interest”.

The passage of the Secure Act presents a unique opportunity for companies to achieve cost efficiencies and reduced liability. The Multiple Employer Plan is a creative and aggregated solution for business owners to offer better workplace retirement benefits. 

An MEP is a single contract plan that is maintained by an MEP sponsor and one or more adopting employers. Each adopting employer signs an agreement to adopt a plan document under the MEP, and each employer is viewed as adopting its own plan for specific regulatory reasons. All component plans use the same service providers and investment vehicles giving them the potential for cost savings through an aggregated solution.

A typical MEP offers employers a variety of options allowing them complete design flexibility-vesting, eligibility, matching or profit-sharing contribution. To the degree that adopting employers don’t deviate from the MEP design options, the MEP sponsor bears nearly all the fiduciary responsibility for the plan. 

In traditional retirement plans, the employer assumes the majority of responsibility for management and administration of the plan. Usually, the employer is also the named fiduciary under ERISA. In this case, an employer could be held liable and required to make employee accounts whole from breaches in fiduciary duties. With the power of the MEP, the employer is much less liable for any losses resulting from a fiduciary breach. 

In addition to corporations, common sponsors of MEPs include professional employer organizations (PEOs), human resource outsourcing organizations, chambers of commerce, franchises, co-ops, and associations. We include retirements plans with $500K-$50M in assets into our Multiple Employer Plan. 

Inadvertent mistakes can create significant problems for fiduciaries and participants. The Multiple Employer Plan can help protect you from Fiduciary Liability. With the Department of Labor auditing more 401(k) plans each year, MEPs keep you from having to bear the brunt of the responsibility for paying fines and penalties for being out of compliance. 

Companies and HR professionals can now free themselves from the majority of the administrative tasks with company retirement plans including signing and filing of the Form 5500, QDRO determinations, authorization of benefit payments, ensuring proper spousal consent on payments, plan operations, participant claims and appeals, distributions, beneficiary determinations, and timely completion and filing of annual information returns on Form 5500, including any related extensions to the plan. Every step of the process is time stamped so the complete data cycle is monitored which results in reduced cost, simplicity, less liability.  

Interested in learning more about our Multiple Employer Plan? Send an email to us at [email protected] and one of our financial representatives will get back to you as soon as possible.