Multiple Employer Plans

The DOL’s advisory Opinion on MEPs in 2012 was specifically premised on the DOL’s interpretation of the definition of “employer,” for health plan (MEWA) purposes. The DOL ‘s position was that it had no authority to redefine their historical definition of employer for MEWA purposes merely for retirement plan purposes, that they were bound by the statute to apply the same “employer” definition to both health plans and retirement plans. Does this mean that the new proposed definition of “employer” will, necessarily, by operation of statute, be expanded for retirement plan purposes as well?
Continue Reading Is a Change in MEP Rules Imminent?

This Opinion demonstrates that the scale we seek is not exclusively the purview of the MEP. Vendors have the ability to safely “bundle administrative services” to the same effect of a MEP, provided that they have enough scale on their own to negotiate the sort of investment pricing and expert services which the market seeks.

Continue Reading DOL Advisory Opinion Demonstrates Structure for Bundling Plans

This legislation could fundamentally change the MEP landscape, and even lessen the contention over state run MEPs. It would do this by opening the market for the advantageously pooling of the resources of small employers which would have otherwise been reserved to the State programs. It also could minimize any need for new federal MEP legislation, and promote models which are a lot less risky than the MEP.
Continue Reading The Most Effective Proposed MEP Legislation Happens Not To Be MEP Legislation

The complex nature of handling 403(b) plans-and, in particular, the unique manner in which the fiduciary rules apply to them-make these plans uniquely suited to customized fiduciary services. It is well beyond the skill set of many 501(c)(3) organizations to make sense of their often complicated 403(b) programs, and to put them into some kind of sensical order. This must be done all the while applying a number of rules intended for the 401(k) market (with their centralized recordkeeping systems) in a plan which may have significant assets held by multiple vendors under a variety of contracts with differing terms.
Continue Reading Managing Critical 403(b) Issues through Proper Allocation of 3(16) and 3(21) Fiduciary Responsibility

A more effective alternative at providing scale than the MEP platform, and one which really is made possible by technology, is what the DOL describes in its MEP IB as the “Prototype Approach,” versions of which are apparently being considered by several states. It provides those small plans the buying power and access to expertise which are at the heart of MEPs, doing so without that platform’s inherent difficulties.

Continue Reading MEPS Aren’t What They Are Seem; Alternative More Efficient at Achieving Scale

MEPs are very valuable tools for the right circumstances, and there can be some PEOs which do fit within the DOL’s guidelines. Even better, non-MEP aggregation arrangements are a valuable alternative to MEPs. It is risky behavior, however, to attempt to manufacture an employment bond that doesn’t really exist-especially when there are viable alternatives.
Continue Reading MEP and the Common Paymaster: A Siren’s Call

There is a serious, and important, debate occurring whether, and to what extent, should there be MEP reform following the DOL’s restrictive advisory opinion on the matter in 2012.  There appears to be bi-partisan support for the changes proposed in Senator Hatch’s SAFE Act, which makes wholesale changes to  the current MEP rules, and will

In an almost stealth-like way, innovation is creeping into the marketplace and creating ways to address critical retirement issues, even without an incubator. Though these programs can do little to address what I view as the basic retirement inadequacy issue-that is, employers are generally moving away from the traditional notion of building adequate retirement programs into their employment models-they are making progress toward making the best of what we’ve got.
Continue Reading Aggregation Models, Plan Loan Insurance, Lifetime Income Patents: Addressing Retirement Security by “Looking Through the Wrong End of a Telescope”