As the industry once again seems to stand on the brink of action with regard to multiple employer plans (MEPs), we asked Summit Insiders to tell us where they stood on open MEP or asset pooling arrangements.
MEPs continue to be a hot topic of conversation, promising to help close the current coverage gap, provide a more efficient means for more employers to offer a retirement plan (which would help close the coverage gap), provide additional ways for providers to (more profitably) serve that market (and thus to help close the coverage gap) – well, you get the point.
Little wonder that the concept has been hotly debated since 2012, when the DOL released Advisory Opinion 2012-04A clarifying its stance that open MEPs (that is, those open to any adopting employer rather than closed to a select group of employers) were not single plans under ERISA but rather a collection of single plans for each adopting employer.
More recently, a directive to explore the opportunities to expand retirement plan access was issued by President Trump to the Labor Department, and versions of open MEPs (renamed “pooled employer plans,” or PEPs) have been included in recent legislative proposals, including the SECURE Act, which was approved by the House of Representatives in May, and the Retirement Enhancement and Savings Act (RESA) currently pending in the Senate.
For the most part, respondents to the 2019 NAPA Summit Insider seemed to be in a “wait and see” mode regarding MEPs – and who can blame them, considering the fits and starts with these proposals.
In fact, a slim plurality (36%) said they were “looking to sell if ‘open MEP’ officially passes.” That said, nearly as many (34%) seemed ready to go, indicating they wanted to “learn more about asset pooling” to scale their practice. And as it turns out, 15% were currently selling asset pooling arrangements – though that was matched by the 15% who said they “don’t see any advantages or understand the opportunity.”
See also: Is ESG Over-Hyped?
