Last week, President Trump signed an executive order in which he directed the Department of Labor and the IRS to create new regulations or guidance designed to, among other items, make it easier for small businesses to join and participate in multiple employer plans (MEP).
This week, Pentegra, a provider of retirement plan and fiduciary outsourcing solutions, released a new white paper to help explain its ramifications and what, exactly, open MEPs are.
Plainly titled “Pentegra’s 2018 Stance on Open MEPs,” it provides an overview of the current environment surrounding MEPs and the history of where the industry stands on these programs today.
The company predicts that the next few years will likely see an acceleration in MEP interest and adoption as the IRS and DOL work to comply with the Executive Order.
“MEPs have been around for nearly a century, and have advantages over single-employer plans,” the paper notes. “But not broadly promoted, historically. There are approximately 5,000 MEPs in the U.S. (less than 1 percent of plans filing a Form 5500), but their application has been limited historically to related employers and a few trade groups—MEPs have not been broadly promoted despite their advantages.”
Adding that a MEP “gold rush” of innovation occurred between 2003 and 2012, the Association Health Plans (AHPs) could be the model that legislators, regulators, and other interested parties use when developing a template for MEP rules.
“Policies that encourage the adoption of and participation in MEPs are certainly preferable to policies that artificially limit access to MEP structures to a handful of industry participants,” Pete Swisher, Pentegra Senior Vice President and National Sales Director, said in a statement. “MEPs are a powerful tool with genuine structural benefits over single employer plans. They are a simple, safe, and cost-effective way for employers to offer retirement benefits while relieving them of many fiduciary and plan administrator responsibilities.”