US. DOL Small Business Retirement Plan Rule Not The Cure-All That’s Needed
In a nod to the small business community, the Department of Labor issued a final rule earlier this week that may nudge more employers to offer joint retirement plans—MEPs—but it’s not all that employers were hoping for. “This is NOT the MEPs that everyone has been so excited about,” says Nevin Adams, chief of marketing for the American Retirement Association via email.
The DOL rule, effective September 30, allows companies in different industries to band together to create a joint retirement plan (a 401(k) or profit-sharing plan) if they are in the same geographic area. For example, the Dallas Chamber of Commerce could sponsor a MEP under the new rule, says Erin Turley, an employee benefits lawyer with McDermott Will & Emery in Dallas, Texas. It also clarifies that Professional Employment Organizations (benefits providers) that sponsor MEPs are okay to be doing so (it was a grey area under DOL regs before). And there’s a new exception that lets worker/owners without employees into PEO MEPs. Before, employers had to have a commonality of interest to form a MEP: An engineering association, for example, could have a “closed” MEP for its members. So, the rule is basically an expansion of existing MEPs—sometimes branded as Association Retirement Plans. Read more @Forbes
Read more @Forbes
