Multiple Employer Plans

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PEPs become a real thing as of the first of the year, though there is still one heckuva paucity of guidance related to them. Many of you may now be pressed as to the question of whether or not you or your clients should choose this road.   I had published a version of the following back in January, but it seems timely to provide it again (in slightly different form), as a hopefully useful tool when you try to weed through your own assessment of these arrangements. It is a Glossary we had put together, which is more topical now as ever.  Keep this as a (hopefully) handy guide when you find yourself caught in the middle of a conversation about “PooledEmployer Plans” and need to quickly summarize the different MEP types:…
Continue Reading Pooled Employer Plans Are Nearly Upon Us: A Review of the Glossary May Help With Your Assessment

The new PEP rules do not add any new services to the marketplace. Rather, PEPs merely reorganize existing services to be provided in a different format, with the one exception is that it now permits unrelated employers to be able to file a consolidated Form 5500. The Department’s issuance of guidance as to the allocation of these different authorities (consistent with in ERISA Section 3(44)(C) which requires the Department to ‘‘(i) to identify the administrative duties and other actions required to be performed by a pooled plan provider…”) is a required condition precedent to the determination of whether any prohibited transaction exemptive relief is necessary in the operation of a PEP.…
Continue Reading PEP Comment to DOL Outlines the Structure of PEPs

Normally, all of the players in any ERISA plan’s life cycle operates under any number of these well-established PTEs. However, in that the PEP is a new sort of arrangement, it is not entirely clear that these existing PTEs will be sufficient to pay all of the PEP players. To address this crucial issue, the DOL has issued a Request for Information on June 18 to gather information on what further, if any, PTE relief will be needed to make the PEP work.There are two noteworthy developments related to these efforts, s the ARA/ASPPA letter to EBSA requesting PTE relief for PEP operatives and, is the letter Congressman Neal wrote to the EBSA.…
Continue Reading Rep. Neal and ARA/ASPPA Differently Address Fundamental Issues Underlying the DOL’s Pooled Employer Plan “Request For Information”

There is in the SECURE Act a volume of small, odd, technical  details which need to which attention needs to be paid. This statute is a technocrat’s dream. So much in there actually raises fundamental  infrastructure issues of the sort we rarely see. We are all familiar with the 80/20 rule, with the caution of not letting perfection become the enemy of good. Well, these “oddities” raise the exact inverse of the 80/20 rule: through my long years in retirement product development,  the highest risk of failure arise from the lack of understanding of how the smallest of details can tank a multi-million dollar project. The “80” may sound good conceptually and structurally, but it is in the implementation of the detail in the 20 which will determine the success of the project.
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Continue Reading Tontines and PEP Late Deferrals Are Among the SECURE Act’s Impactful, Infrastructure Oddities

The one topic which seems to be on the forefront of a significant number of professionals, however, is the attempt to make sense of the new MEP and PEP rules. This is especially so because they follow so closely on the Association Retirement Plan regs finalized by the DOL and the “Unified Plan (“bad apple”) rule proposed by the IRS.  These commentators seem to be taking are common misstep, however:  it seems like (with rare exception) that each of these analyses are missing the assessment of the use of the “Group of Plans,”or “GoP”, in relation to MEPs and PEPs.…
Continue Reading A Valid “Multiple Employer Plans”/ “Pooled Employer Plans” Assessment Requires Inclusion of the “Group of Plans”

“Aggregating” plans has now taken center stage with the passage of the SECURE Act. We now often find ourselves a bit muddled by the new array of terms with which we now need to deal.  Keep this as a handy glossary to guide when you find yourself caught in the middle of a conversation about “Multiple Employer Plans:”…
Continue Reading A Basic “Comparison Glossary” for MEPS and MEP Types After the SECURE Act

DOL’s new Field assistance Bulletin, 2019-01 is designed to correct common MEP Form 5500 filing issues. The most telling stories about this FAB is that (1) it establishes the data  groundwork that both the DOL and the IRS need to determine what requirements will need to be imposed when RESA and SECURE (or their successors) eventually pass; and (2) for those who argued that this data is somehow an unwarranted imposition of an administrative burden on MEP operations need to be prepared, I think, for a substantial new set of regulations over time designed so that the agencies have sufficient information to fulfill their mandate.…
Continue Reading DOL’s Unexpected New MEP Field Assistance Bulletin 2019-01: A First Housekeeping Step in Getting Ready for New MEPs and Group Arrangement Rules

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.

But the IRS proposal only really addresses small part of what actually happens when a plan is forcibly spun off, which may take a significant regulatory effort-especially if RESA/SECURE become law.…
Continue Reading The Illusory Benefit of the IRS’s Proposed Correction to the MEP “One Bad Apple” Rule

For all the noisy support being generated for the changes to Multiple Employer Plan arrangements in RESA and SECURE, little notice is being given to the provisions which are likely to have a much more meaningful impact on the ability for smaller plans to obtain the advantages of scale: the rules permitting the “Combined Annual Report for Groups of Plans.”…
Continue Reading RESA and the SECURE Act’s Simple “Non-MEP” Fintech Alternative May Have Greater Impact than the MEP provisions.

The comment letter addresses the DOL’s main concern in initially prohibiting non-PEO commercial enterprises from becoming MEP sponsors. The Department is concerned that allowing any commercial enterprise to sponsor a MEP  would turn ERISA into a purely “commercial” statute. Any company- whether or not it is a large financial service company or a smaller service provider-who can meet all of the MEP sponsor compliance rules should be entitled to sponsor a MEP, and the marketplace would be better for it. And ERISA would maintain its validity as a strong, employment based set of laws.…
Continue Reading The TAG Comment to the DOL MEP proposal: The DOL’s Own Reasoning Supports MEPs Being “Open”