Tag Archives: Multiple Employer Plan

Multiple Employer Plans Grabbing More Attention

A concerted effort in Washington to get more employers to offer retirement plans has raised the profile of multiple employer plans, a largely untapped market for institutional money managers and other service providers.

Multiple Employer Plan

Unlike multi employer plans, which serve employers in a specific industry and are typically collectively bargained and managed, a multiple employer plan is adopted by two or more unrelated employers that do not want the administrative burdens and fiduciary responsibilities of sponsoring a plan themselves.

The three types of MEPs are those sponsored by a professional employer organization such as an employee leasing company, which can offer it to clients; by a trade group for its members; or “open” MEPs co-sponsored by employers with no business connection.

Some MEPs are several decades old, with the concept well established among professional organizations and associations as well as large corporations with numerous subsidiaries. It has not, however, taken off with small and midsize firms. That’s because there has been a lack of guidance or sometimes conflicting guidance from the Internal Revenue Service, which has authority over the tax status of retirement plans, and the Department of Labor, which enforces the participant protections of the Employee Retirement Income Security Act. The Labor Department has reservations about open MEPs in particular.

Now, with four legislative proposals making the rounds on Capitol Hill to help clear up the confusion and make it easier to form multiple plans, “it’s going to help conquer what I consider the last frontier,” said Edward Ferrigno, vice president for Washington affairs for the Plan Sponsor Council of America. Read More

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Platinum 401k Adds Hartford Lifetime Income Option to MEP

The Platinum 401k multiple employer plan program will now include a retirement income option from The Hartford.

MEP

The Platinum 401k multiple employer plan (MEP) allows plan sponsors to eliminate their annual plan audit, Form 5500 filings, trustee-level liability, and investment fund selection responsibility. It features investment products from Great-West Retirement Services, John Hancock, and The Hartford.

“We’ve seen a growing interest from employers who are seeking income protection for their employees in retirement”, said Terrance Power, President of American Pension Services. “The Hartford’s new Lifetime Income program addresses that demand in the marketplace.”

For details on the program, visit www.ThePlatinum401k.com.

Retirement Plan Outsourcing Allows You to Focus on Your Business

Increasing operational and compliance concerns are causing employers to consider alternatives to traditional “single employer retirement plan” programs. In the past, employers needed to assume full responsibility for investment fund selection and monitoring, changing regulatory requirements, approval of QDRO’s, employee hardship requests, beneficiary payments, Form 5500 filings, plan documents, annual notice requirements, and much more. Quarterly investment and plan committee meetings tie up senior employee schedule time as employers struggle with what seems like an ever-increasing workload of regulatory and compliance hurdles. Additionally, in most cases employers shoulder personal financial responsibility for any mistakes that might be inadvertently made in operating their plan. This is unacceptable when there are other options available to the employer.

The Platinum 401k Can Handle All Of These Challenges And More!

Our unique multi-provider program is the leader in the retirement plan industry. With over 25 years of experience in working with multiple employer plan clients and with the flexibility to tailor investment providers – and pricing – to each client, our professionals enjoy a unique reputation for retirement plan excellence across the country.

Multiple Employer Plan

What Does All Of This Mean To You And Your Company’s Retirement Plan?

Investment Provider Flexibility

The Platinum 401k allows you the ability to choose from a selection of leading investment providers.

Plan Design Flexibility

Our program can seamlessly accommodate any existing prototype document plan design.

Pricing Flexibility

By custom pricing each adopter individually, clients can receive pricing concessions as assets grow.

Reduce Your Fiduciary Liability and Focus On Running Your Company

You can eliminate your role as a Plan Trustee, and also reduce or eliminate many of the traditional duties associated with running a retirement plan. Save time, save money, and enjoy peace of mind.

Lower your costs, lower your liability, and have less headaches. Run your 401k plan just like you run all of your other employee benefit programs – hire a provider who then assumes the responsibility for virtually all of the day-to-day fiduciary oversight! Read More

Retirement plan solutions

It’s Time for the DOL to Rescind their Advisory Opinion 2012-04A

On May 29, 2012, the U.S. Department of Labor issued Advisory Opinion 2012-04A.

This document explained the Department of Labor’s position, at that time, on the use of multiple employer plans as they relate to companies who did not have any specific commonality or nexus that would otherwise tie them together.

It did not change the Internal Revenue Code Section 413(c) one bit, nor did it appear to change the position of the Internal Revenue Service on these types of programs. It did require multiple employer plan adopters to file individual Form 5500’s, incur the cost for an individual annual plan audit as required under current regulations, and to possess an ERISA bond for their portion of the plan.

Perhaps a walk down memory lane might offer some perspective as to why the Advisory Opinion was issued in the manner in which it was.

Multiple Employer Plan

In April 2012, noted “fiduciary expert” and multiple employer plan proponent Matthew Hutcheson was indicted on charges of stealing millions of dollars from a multiple employer plan that he oversaw (Hutcheson was eventually found guilty and sentenced to 17 years in federal prison for his crimes in 2013). The DOL issued a press release on June 14, 2012 (two weeks after the Advisory Opinion 2012-04A was released) announcing that they had obtained an injunction against Hutcheson relating to ERISA violations surrounding that case. They were right to do so.

Why is this timeline important? Clearly, during the time that the DOL was considering attorney Robert Toth’s request for a favorable opinion from them, the entire Hutcheson mess came to light…..and had the kneejerk effect of creating an “all multiple employer plans are bad” reaction from the DOL.

While on the surface, this could appear to be a rational reaction to the theft of millions and millions of dollars from plan participants.

A deeper dive into the Department of Labor’s own records of enforcement from their website, however, show much greater problems with operational compliance and theft occurring from single employer defined contribution and defined benefit plans when compared to multiple employer plan by an enormous margin.

It’s not even close. It’s not the plan structure that led to the theft, it was the criminal who was running the plan. Read More...

The Platinum 401k Open Multiple Employer Plan

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The Platinum 401kAmerica’s Multiple Employer Plan and 401k Outsourcing experts! With over 35 years of industry experience, we help employers focus on running their businesses instead of their 401k plan!

Learn more about us at http://www.theplatinum401k.com/.

We assist retirement plan trustees in reducing their fiduciary responsibilities and liability by outsourcing many of the duties to experienced independent ERISA fiduciaries. We also work with retirement plan advisers all across the country to provide them with an outstanding multi-provider fiduciary solution for their clients.

If you are responsible for overseeing a corporate retirement plan and would like to lessen your liability, responsibilities, workload, and expenses, we probably need to talk.

Contact Terrance Power, at 813.774.3366 or tpower@theplatinum401k.com for more information about our multiple employer plan solutions!

Senate Bill 3471 Would Greatly Expand Multiple Employer Plans in 2020

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U.S. Senator Orrin Hatch has introduced the Retirement Enhancement Savings Act (RESA) of 2016 in the U.S. Senate. It is widely anticipated that this bipartisan legislation will be included in the Continuing Resolution Bill that is expected to be signed into law on December 9, 2016.

RESA will greatly expand multiple employer plans for unrelated employers beginning with the 2020 plan year. I was interviewed by Investment News last week on the developments: Read More

The Pep Talk – What’s Coming for MEP’s

I was recently interviewed by Ary Rosenbaum for his web blog site, that401ksite.com, concerning recent developments that impact multiple employer plans.5khikk4ydtogbmotlxtltzl72ejkfbmt4t8yenimkbvvk0ktmf0xjctabnaljim9

Proposed bipartisan legislation will allow “open multiple employer plans” to be replaced by “pooled employer plans” – “PEPs” beginning in 2020 if the U.S. Senate Finance Committee has its way. Pooled Plan Providers – “PPP” or “P3” will be able to oversee these plans according to yet to be released regulations.

We’ll be making a new website that discusses the conversion process live shortly after the legislation is enacted, which is anticipated to be as early as December 2016 or early in the next Congress. Look for an announcement about http://www.MEP2PEP.com down the road. Read More