Is the Time at Hand for 'Open Meps' - repost from Unified Trust Blog

Time and timing are funny things.  A good idea may be a good idea, but the timing of that idea can be everything.  Back in 2010 and 2011, it seemed like I couldn’t have a conversation with an advisor or go to an industry conference without hearing about so-called ‘Open Multiple Employer Plans’ or ‘Open MEPs’.  At first, they almost sounded fake to me, as we in the industry have a tendency to create marketing or sales terms.  Of course, I was aware of MEPs, but only in the context of what we’re now calling ‘closed’ or ‘traditional’ MEPs.  The concept behind a MEP was always that the related business’ sharing some kind of a nexus or commonality could essentially join into the same retirement plan.  By banding together, economies of scale had the potential to provide better investments, lower fees and less fiduciary risk-all good benefits.  The nexus was important as it kept this exclusive to related or very similar entities.

There had been  a lot of noise in the market that Open MEPs, where this commonality didn’t exist, were also okay.  This struck me as odd.  Did the rules change when I wasn’t paying attention? I don’t think so.  I’ve come to the conclusion that what did change was that the market decided that the existing rules weren’t clear enough. There was a disconnect between what was written into ERISA on MEPs and what was absent in the Internal Revenue Code about MEPs.  Because of this lack of continuity, some aggressive players in the market went ahead with the Open MEP idea, taking the position that if it isn’t explicitly prohibited, it was therefore permitted.  I remained skeptical and even wrote about it on my personal blog (MEP’s EBSA Speaks and More Opinions).  Then in May of 2012, the Department of Labor issued the TOTH Letter, DOL Advisory Opinion 2012-04A.  With this stroke of the pen (or keyboard), all of the noise in the market quieted down.

Flash forward four years and this concept is again at the forefront of the conversation.  In fact, a version of Open MEPs, now being called Pooled Employer Plans (PEPs) is close to becoming a legal structure.  Prior to the election, I was interviewed on this subject (Multiple Employer Plans Have a Bright Future) and discussed whether or not this idea would have its day.  The creation of these new PEP plans is part of a bill that was marked up by the Senate Finance Committee in September called The Retirement Enhancement Savings Act of 2016.  This bill supports the notion of an Open MEP, now being called a PEP, effectively removing the nexus requirement if certain conditions are met.  Timing is everything and now the question really is, when will this bill get passed?  It has made it through Senate Finance unanimously (a very rare occurrence) and has bipartisan support.  At this point, it seems that the only decisions left to be made are regarding  what broader piece of legislation will this Act be attached to and which president will get the credit for it, Obama or Trump.

Professionally, I find this exciting.  As readers know, Unified Trust Company is a professional ‘named fiduciary’ in our role as Discretionary Corporate Trustee over retirement plans.  Within these new PEP requirements are the appointments of a “pooled plan provider”, a ‘named fiduciary’ to act as the plan administrator and one or more named trustees who “must be  a bank or other financial institution” that would be responsible for contributions and assets.  Unified Trust would be a great fit potentially for some of these roles.  Whether these come to fruition sometime soon or not, the future is looking very bright.

- Jason Grantz

"The Government Does Not Do It Better" - Brian Graff, and he's dead on right about that!

Over the last few weeks I've been doing a bit of thinking regarding the state of the retirement plan industry, where it is now, where it's heading.  A lot of the noise that's out there right now seems to be centered around retirement plan litigation, mainly the spate of recent excessive fee lawsuits that have settled and the many more recently filed.  Further still is more negative energy and interest surrounding the forthcoming finalized rules for the Conflict of Interest Rule (aka the new fiduciary definition).  While these topics are important and certainly bear observation and reaction as they play out, to me, the biggest threat on the horizon is a bit closer to home, at the state level.

While the industry is looking left at all this fee and fiduciary stuff, the DOL was on the right, quietly creating a major threat to the private sector by giving a significant advantage to publicly offered (by the state.....so far) employer facilitated retirement plans.  This isn't new stuff, it's been percolating through the system for quite some time.  It gained steam, however, over the summer.  In May, Senate Democrats put pressure on the Obama administration to clarify some legal issues surrounding state run retirement programs.  In particular was whether or not these new programs would be covered by or run afoul of ERISA.  In July, the president responded directing the DOL to facilitate the implementation of state laws protecting the states.  Finally, on November 16th, the DOL released comprehensive guidance creating a road map to the creation of state-run private sector retirement programs that would have different (frankly better) rules than that of the private sector.  Many states have already started down the path to creating these.

These new rules have created a safe harbor for payroll deducted IRA programs run through the state without offering an equal safe harbor for the private sector.  It also allows for the states to proceed with creating an "Open MEP" type program while simultaneously not providing similar guidance for the private sector.  This will foster extreme competition to the private sector in the next few years from the states, and in my opinion, also opens the door for the federal government to follow suit with a national program similar to what was done with health care.  This is the real threat to the private sector retirement system, NOT the Conflict of Interest Rule which is mainly going to be an inconvenience that we'll all figure out how to work with. 

Brian Graff wrote a great piece on it in the latest Plan Consultant Magazine.  It's a MUST-READ for anyone in the industry.  It's linked here.

The Government Does Not Do It Better

- Jason Grantz

Hatch's remarks on Pension Reform - Financial Services Roundtable:

Really interesting read on where the thinking in this area is, the whole speech can be found in this article -->

http://www.stgeorgeutah.com/news/archive/2014/12/15/hatch-outlines-pension-reform-retirement-savings/#.VI9NpHuEzaV

Here are the parts on private Pension Reform:

"....The good news is that the private employer-based retirement savings system in the United States – particularly 401(k) plans and Individual Retirement Accounts, or IRAs – has become the greatest wealth creator for the middle class in history and represents truly shared prosperity.

The bad news is that the retirement of the baby boom generation is putting enormous pressure on public programs like Social Security and Medicare.

And, as part of the unending effort on Capitol Hill to find more revenue to pay for increased spending, some have proposed reducing the allowed contributions to 401(k) plans and IRAs.

That, in my view, would be both short-sighted and foolish. - GREAT LINE!!!

Some in Congress seem to have forgotten that this is well-covered territory.  Indeed, Congress has already examined this issue and made the policy call decidedly against contribution reductions.
In 2001, Congress increased the limits for contributions to 401(k) plans and IRAs.
Congress also added a catch-up contribution feature that allows workers to contribute several thousand dollars more per year beginning in their 50s, an age when many workers finally get serious about saving.



One thing we have learned over the years is that the key to successful retirement savings is participation by employees in a plan at work, and the key to convincing employers to sponsor a plan at work is a healthy contribution limit.


Since 2000, the year before Congress raised the contribution limits, retirement assets in defined contribution plans have grown from around $3 trillion to nearly $6 trillion, despite the market downturn in 2008.  Assets in IRAs have grown from $2.6 trillion to $6.5 trillion.

In fact, increased contribution limits worked so well that, in 2006, Congress made those provisions permanent, and the vote to make them permanent was overwhelming:  in the Senate, the vote was 93 to 5.

We have spent a lot of time in recent years defending the gains we have achieved in the 401(k) system.  But in 2015 we can, and in my opinion should, go on offense. Toward that end, we must encourage employers who don’t sponsor plans to set them up.  That’s why last year I introduced legislation to create the Starter 401(k), a plan designed for small or start-up businesses that are not in a position to contribute to a plan but still want to help their employees save.

A Starter 401(k) is a new kind of plan that does not come with all the administrative burdens or expenses of a traditional 401(k) plan.  The plan allows employees to contribute between $8,000 and $10,000 per year, which is a little bit less than what would be allowed under a traditional 401(k), but much more than an IRA.



I believe the Starter 401(k) plan in my legislation could help to revolutionize retirement savings for employees of small businesses throughout the country.  My bill also allows unrelated small employers to pool their assets in a single 401(k) plan to achieve better investment outcomes, lower costs, and easier administration.  This idea, which is called an “Open MEP” is one that many on both sides of the aisle in Congress support.  It’s an idea whose time has come.


Of course, we cannot talk about retirement savings without discussing the importance of lifetime income.  We have fought for years to enact policies that will encourage greater savings and investment.  But, I don’t think our efforts will provide much to comfort those whose retirement assets run out before the end of their lives.

That’s why the legislation I introduced last year encourages the purchase of fixed annuity contracts for retirement.  In fact, the bill is called the Secure Annuities for Employee Retirement Act, or the SAFE Retirement Act.

Why life insurance annuity contracts?  Well, lifetime income is a form of life insurance.  Most people tend to think of life insurance as insurance against the risk of living an unexpectedly short life.  And that is certainly true.  But life insurance also includes insurance for the possibility that someone might live an unexpectedly long life.

We call that form of life insurance a life annuity and it only makes sense to encourage the use of annuities to provide retirement security.

My legislation encourages the use of annuities in 401(k) plans.  First, we remove obstacles to adding annuity-purchase options to 401(k) plans and, second, we provide employers a liability safe-harbor.  That way, employers are encouraged to add annuity options to their plans and employees are encouraged to use them......"

Senator Hatch goes on a bit about public pension reform as well, but key takeaways from this.  There's a strong advocate for the proliferation of the 401(k) and future versions of it in Congress now, who's thinking smartly and creatively about ways to expand coverage, reduce barriers to usage and protect participants.  That's leadership that I can get behind.  Let's hope that these measures make it through and become law.

- Jason Grantz

MEPs - New legislation could cause some unintended consequences

Back in April, The Cooperative and Small Employer Charity Pension Flexibility Act of 2014 was enacted (CSEC Act).  In this act, according to this blog post on the Business of Benefits website
 (linked here --> http://www.businessofbenefits.com/2014/11/articles/multiple-employer-plans/hidden-new-mep-5500-legislation-requires-substantial-new-reporting-for-2014-plan-year/

New MEP 5500 Legislation Requires Substantial New Reporting for 2014 Plan Year!

According to the post (written by Bob Toth, thanks Bob), MEPs will now have to report all of their participating employers, their EIN and a good faith estimate of the “percentage of the contributions made by all participating employers made by each employer relative to the total contributions made by each employer.”

The new reporting rules apply to all MEPs, including those 401(k) MEPs run by PEOs and payroll companies.  This will have a significant impact on these types of arrangements:  now that each participating employer name and EIN will be listed in the Form 5500, one would expect these plans to see substantially increased audit activity from both the DOL and the IRS.  Prior to this rule, only the Lead Employer in a MEP would (as a practical matter) be audited.

In addition to what will amount to increased MEP costs and increased MEP scrutiny will be, most likely, an unintended consequence.......increased marketing to and selling to adopting employers of MEPs.  A common area of mining for attractive potential new business is via the 5500 filings.  Up until now, one of the benefits of adopting an MEP is that the 5500 was filed as a group, but the members of the group all remained individually veiled.  So while these new reporting requirements will almost certainly lead to increased scrutiny from the DOL and IRS, it will also almost certainly lead to increased selling against the MEPs to the various adopting employers simply by being unveiled to the general public.  Time will tell, but very interesting developments to keep an eye on especially if any "Open MEP" legislation gets passed in the next year or two.

- Jason

How to Fix the 401(k) - Wall Street Journal's thoughts

Earlier this week an article was published in the Wall Street Journal and the topic of the article was on how to fix the 401(k).  This is a favorite topic of mine, although based on the title one would assume that the 401(k) is broken which I do not agree with.  Not to say that the industry doesn't have its problems, it does, but to paint the whole tax code section as broken is a little too far.  Linked below is the article.

http://online.wsj.com/articles/how-to-fix-the-401-k-1401743224?KEYWORDS=Fix+the+401k

Within this article there is the usual anti-401(k) rhetoric from the usual suspects, Monique Morrisey of the Economic Policy Institute calls the system broken and then opines that the issue with the system is one of confidence; that people will save more if they are confident in the outcome.  This is a very Ivory Tower opinion from someone whom, I suspect, has never conducted an employee enrollment or education meeting or actual sat with participants and observed first hand what the inhibition to adequate savings actually was.  The savings issue, in my experience, is not one of confidence, but rather one that has two primary obstacles. 

1.) Affordability - Participants who do want to save, may not actually be able to afford to save.  So they put away what they can afford, and often that isn't enough.  Is that a confidence issue?  Not to me it isn't.

2.) Behavioral issues such as inertia, procrastination, distractions, etc. inhibit people from giving the retirement plan benefit the importance it deserves.  This is especially prevalent with younger workers, workers new to the workplace or transient workers.  Again, not a confidence issue, something else entirely.

The author of the article suggests Five Ways to "Fix the 401k".  Here they are in order.

1.) Simplify Fee Disclosure - Can't argue this point.  I agree, a simplified method for clearly and plainly stating all fees is a good idea.  In fact, this was what 408(b)-2 was supposed to do, but the regulation left too many loopholes and many of the providers are highly motivated to keep fees opaque.   While this is true, I don't think that fee clarity (or lack thereof) is an inhibitor of plan formation or of participation in plans.  Nonetheless, it is a good idea. 

But the article goes too far, it cites data that big plans pay a lower percentage than small plans, but doesn't show the math that the big plans pay a HUGELY larger dollar amount for service than small plans.  Simple math will tell you that $1000 cost on a $1m plan is 0.1%, but $1000 on a $100k plan is a full 1%.  Same dollars bigger % for the smaller plan.  The article even cites the Center for American Progress to require that funds carry a warning label akin to cigarettes or alcohol.  Are we trying to scare people into not saving or not investing?  REALLY!?  Actually, maybe this would be a way to get the 18-21 year olds into a plan (tongue firmly planted in cheek).

2.) Require plans to offer low-cost index funds - I/we would generally agree that index funds are a good idea to put into retirement plans.  The selection of which ones to use and in which asset classes index funds are most useful is a matter of debate, but good process will generally lead to a good selection in this area.  My issue is with the mandate of offering them.  Question: which ones do we use, I'm sure Vanguard will want to weigh in on this debate.  Which asset classes?  All of them?  I'm sure there would be lots of arguments among investment professional regarding where passive investing makes sense and where it doesn't. 

***By the way, this is really an extension of the first "fix", which is an effort to reduce fees***  How about instead, we require that all 401(k) plans use institutionally priced investments with a uniform conformity (call them K shares) which are no-load, don't have revenue sharing or other embedded distribution fees and level the playing field.  I'm sure this would accomplish the same thing while leaving choice in place.

3.) Require plan features that nudge people to save more - This is a good idea.  Employ Automatic Enrollment and Automatic Savings Escalators with employee opt out provisions.  We suggest these ideas to virtually every client we meet with.  However, before forcing a plan design feature with a mandate that requires additional administration (and the additional mistakes that come with it), we should tread lightly and acknowledge that not every plan sponsor has the practical capabilities to handle these types of designs. 

4.) Have those providing guidance be fiduciaries - This isn't new ground.  This has been getting thrown around for years and, at this point, most of those of us that are serious in this industry are already acknowledged fiduciaries or at least act like them even if they can't say that they are.

5.) Start a national 401(k) Plan for small employers - Again this is all back to the first issue, fees.  Fees, fees, fees, fees, fees!!!!!   It seems to be the only thing that critics can really focus on which is a shame b/c, we operate in a free market.  The private industry has its "cheap fee" providers, it's expensive providers and those in the middle.  Just like in the auto industry, the telecom industry and every other industry.  If a 5 person company with no employees really wanted to start a 401(k) plan, buy cheap recordkeeping and pick Vanguard index funds for their employees.....that service is out there already!  It's only when they want to start adding services, like advice, custom plan design, fiduciary services, etc. that fees go up.

The govt. option will be another burden to the tax payer, many of which would not benefit from this new system.  I don't disagree that small plans should be allowed to pool together somehow to gain economies of scale, perhaps in a Multiple Employer Plan (MEP) format.  But again, that can be handled by private industry, just need the rules to allow such things.

So, did this WSJ article do its job in "fixing" the 401(k).  Hardly, this was a weak effort by a highly respected periodical. 

Trends for 2014, and beyond!

The year is coming to a close and, frankly, while excited for what lies ahead, I'm saddened to see the end of 2013.  2013 proved to be another great year both on a personal and professional level and while I reflect back on all of the success we've been having, I remind myself to be mindful of what lies ahead, 2014! 

As we transition past the legislative issues that have been bogging down the industry (MEP's, Fee Disclosure, fiduciary definition, etc.), the industry finally starts to put service improvement at the forefront.  In this article, published in Employee Benefit News, author Robert Lawton highlights five trends that he seems coming for 2014 and beyond and, candidly, I agree with him!

1.) Simple, simpler, and simply simplify!! - Plans, that is.
2.) More Target Date fund and/or managed account usage for participants.
3.) Focus on outcomes
4.) Retirement Readiness - Seems like tied to #3 to me.
5.) Shift from cost reduction and into monitoring

Below is a link to the complete article.  I hope Mr. Lawton has a perfect Crystal Ball.

http://ebn.benefitnews.com/blog/ebviews/top-5-401k-plan-trends-2014-2738237-1.html

Open MEPs - Another Nail in the Coffin....

As previously discussed on this blog last summer (July and August, 2011 and then again earlier this year in April), the DOL has officially released a formal opinion, DOL 2012-04A dealing with the concept of the Open MEP or unrelated employer Multiple Employer Plan.  The letter can be found here:

http://www.dol.gov/ebsa/regs/aos/ao2012-04a.html

I'm going to refer to this letter as the Toth Letter - as he is the party it is addressed to.  The questions posed in the request by Mr. Toth were as to whether the 'Advantage 401(k)' operated by 401(k) Advantage LLC and TAG Resources would be viewed by the DOL as a single "employee pension benefit plan" even though it was to provide services to multiple otherwise unrelated employers. 

Please peruse the letter for the details, but the result of this letter is that this plan (and assumingly others like it) would not be considered a single plan, but rather a group of individual plans.  It also reaffirms the notion that adopting employers of MEP programs are still considered to be fiduciaries under the meaning of ERISA.  From this author's point of view, this is not surprising news, but rather reaffirming of what we've been saying all along. 

Nonetheless, it does give a viable source opinion to refute any assertion that Open-End MEP programs are a "magic bullet" for employers.

MEP's - EBSA Speaks and More Opinions Coming

Well folks, for those of you who know me, you've probably come to understand that I'm a cautious (re: Prudent) person by nature. I'm suspicious of new spins on old concepts and of slick sales pitches which are used to imply one thing, but deliver something less. In that context, I've written, at times sarcastically, about Multiple Employer Plans (MEPs). My underlying message has always been, Proceed with Caution. The idea is that if sounds too good to be true, it usually is and it doesn't hurt to question the idea at its source.

Recently, I personally attended the annual 401(k) Sales Summit put on by the American Society of Pension Profesionals & Actuaries (ASPPA). At the opening of Day 2 of the conference, I attended a session which was a one on one interview of Michael Davis of the Department of Labor by Brian Graff of ASPPA. There were several topics discussed, upcoming fee disclosure rules, the proposed expanded definition of a fiduciary, and yes, MEPs. Mr. Davis, was one of the better DOL speakers I've heard present and I felt he was very clear in that he felt that the current rules governing Qualified Retirement Plans (the ERISA) do not support the concept of an "Open MEP", meaning MEPs for employers that are unrelated and subjected to a collective bargaining agreement. He mentioned this three separate times, so it was very clear. This took place on March 19, 2012.

Interestingly, this news was met with shock/surprise (perhaps anger?) by many of the members of the audience, whom are other pension practitioners like myself. It SHOULDN'T have come to a surprise to anyone as these remarks are consistent with what has been coming out of EBSA for the last year or so, and even again just two weeks prior on March 7, 2012 at Phyllis Borzi's (Assistant Secretary of Labor) testimony to the Special Committee on Aging of the U.S. Senate. Press Release Here --> http://www.dol.gov/ebsa/newsroom/ty030712.html.

In this testimony, Ms. Borzi specifically stated that the idea of "Open MEPs" is not an established concept under ERISA and went on to express concerns about aggressive marketing and promotion of Open MEPs stating that:

1. Adopting Employers are fully releived of fiduciary obligations for administering and monitoring investments and of administrative reporting duties.


2. That by pooling plans together can reduce administrative burdens and costs.

They have stated that two separate Opinions will be forthcoming dealing with the concept of the Open MEP. We are on record (see blog posts from July 2011 and again in August 2011) stating that we believe that any person/entity that may excercise discretion or control over plan assets (whether specifically named in the plan document or not) is a fiduciary as defined under ERISA Section 3(21) and that includes employers who adopt into an MEP. If the rules change, we may also change our opinion. Until then, the message remains, BE CAUTIOUS. Investigate these structures thoroughly including gaining a strong understanding of the relationship between those providing services to the plan (and charging fees) and those in a fiduciary position. We believe that many of the ones we've looked at appear to be in violation of the ERISA Prohibited Transaction rules.

MEPs, Mediocre Employer Protection....Just Kidding, continued

As a follow-up to an earlier post from July 6th regarding Multiple Employer Plans, this author recently discovered (thanks Alan) an article that discusses the matter in much greater detail, linked here


http//www3.cfo.com/article/2011/8/retirement-plans_trouble-ahead-for-multiple-employer-retirement-plans

This article, published on cfo.com, titled 'Trouble Ahead for Multiple-Employer Retirement Plans?" is very thorough in its description of MEPs, concerns of the DOL and what the perceived and actual benefits to employers are for participating in them.

This author beleives that meaningful gains can be had in both the area of fiduciary relief and in economies of scale, but that it requires properly vetted and structured MEP programs. Given the amount of recent attention given to these programs, and a trend towards "open" MEPs, or MEPs of unrelated employers, the DOL was promted to make its voice heard on the matter.

Based on the DOLs comments, and our own interpretations of the statutes, we still believe that MEP programs can work well, but from a prudence perspective, we believe they are better structured as "closed" MEPs, meaning that the employer is CLEARLY related. An example of this can be a corporate entity and a group of franchises of the corporate entity.

Final thoughts (for now):

When, as a Plan Sponsor, evaluating whether to adopt a MEP or, as an advisor, whether to advise a client on the merits of a MEP program, I think a detailed evaluation of the structure should be documented and stored in employer minutes, thus, aiding in satisfying the fiduciary requirement of prudent selection. Even though the decision to join a MEP is typically stated as a settlor function, meaning business decision, the control of assets that typically follows puts that decison maker into fiduciary status.

In the previously linked article, the author raises the concern of a TPA sponsoring a MEP program which would be then offered out to its clients. This is a perfect example of an issue that would be discovered if the MEP program is vetted structurally. Under this scenario, the TPA, as an employer would be the primary adopter (or MEP Sponsor) and therefore clearly a fiduciary to the plan. Any financial benefit that TPA would then receive from the MEP, for example fees they charge to administer it for any/all future adopting employers, could then be (and likely would be) interpreted as self dealing. This is a clear violation of the Prohibited Transaction rules of ERISA, but one that the TPA likely isn't even aware they are violating. This is just an example, but their are many other equally risky scenarios that can play out. Caution is advised before proceeding into these types of arrangements without an expert level of understanding. In other words, if there was every a place to consult rather than sell to a client, this is it.

MEP's - Mediocre Employer Protection.....Just Kidding

Actually, the purpose of this post is in response to those seeking some "opinions" on whether MEP's, Multiple Employer Plans, are a good idea or not. The pros/cons are out there, on the pro's side is potential economies of scale and, theoretically, increased fiduciary protection. It has been this author's contention that the MEP is not a silver bullet (as has been sold by various MEP sales people), but isn't a bad idea necessarily. There is a place for all creative designs in the marketplace.

We believe that with a contained, related group of employers and the proper service providers in place, that a MEP structure can work quite well. Think about that small group of franchise owners who are related, but don't have a good employee benefit while the main franchise has a very strong one. Assuming the vendors can work with the group to allow it to be feasible from a cost perspective, this group could benefit quite well from a MEP structure.

That said, although an Employer who adopts a MEP plan for their employees is giving up 'Named Fiduciary' status, meaning they will no longer be the named Plan Sponsor or the Named Administrator or Named Trustee, we believe they will still be a fiduciary under ERISA and will have some remaining obligations. Specificully, under the definition of a fiduciary, ERISA §3(21) has 3 parts. Two of those parts deal with the ability to or the actual excercising of discretion over plan assets. It is under this formal definition that an employer who adopts a MEP is still a fiduciary. Ultimately, at their discretion they are opting into and may opt out of the MEP and this is an excercise of control over plan assets. Therefore, they are still a fiduciary and still have quite a bit of residual responsibilities and risk.

Recently, a series of opinions and subsequent postings have appeared that provide the user with some cautionary advice on MEP programs. See these two links, one from ASPPA and one from The Law Offices of Ilene H. Ferenczy, LLC.

http://www.asppa.org/document-vault/pdfs/asaps/2011/11-22.aspx

https://app.e2ma.net/app/view:CampaignPublic/id:18861.7106427767/rid:fcf0ab2197415e4f2bd0df8fc3501b8c

Interestingly, these are more from the administrative point of view, but also site DOL opinions and a recent discussion held between members of the DOL and IRS with members of the Govt. Action Committee (GAC) of ASPPA. The result is a stated opinion that many of the so-called MEP programs out there wouldn't qualify as MEPs at all because many of the employers are unrelated and therefore fail to meet the qualification. Under those scenarios, if discovered, those plans would be required to file their own 5500's, test separately, have their own fiduciaries, etc. This is VERY different than the way that these increasingly popular "open-end" MEPs are being sold in the marketplace. I think this is a good case of 'Buyer Beware'. The employers are buying a Panacea or Cure-All for their responsibilities, but in reality they aren't gaining much, if anything.

As always, we welcome any differing view points or clarifications. Please, nothing commercial or it will not be posted.