Legislation backed by the American Retirement Association that would “make improvements so that more organizations and small businesses can participate in multiple employer plans (MEPs)” has been introduced in the U.S. Senate.
Sens. Chuck Grassley (R-Iowa), Maggie Hassan (D-N.H.) and James Lankford (R-Okla.) have just introduced the Improving Access to Retirement Savings Act. The legislation will allow more groups to participate in MEPs by:
- allowing 403(b) plans to participate in MEPs; it also includes a provision supported by the ARA that requires the Treasury and DOL to educate nonprofit plan sponsors on their fiduciary obligations; and
- clarifying that small employers that join a MEP may take the small employer pension plan start-up credit for their first three years in a MEP, regardless of how long the MEP has been in existence.
Additionally, the legislation allows for a grace period to correct reasonable errors in administering automatic enrollment and escalation features when groups are enrolling in a MEP, provided they are corrected within 9½ months after the end of the year in which the mistakes were made. It would also provide employers additional time to make retroactive plan amendments that increase benefits for employees.
The latter point was specifically championed and highlighted by the American Retirement Association. “This new deadline to adopt a beneficial discretionary amendment is consistent with the deadline to adopt a new retirement plan that was provided for in the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019,” explained ARA CEO Brian Graff in a letter supporting the legislation. “This provision gives employers with existing retirement plans the flexibility to make their 401(k) plans more generous to rank and files workers after the end of the year.”
“This legislation will help more Americans save for their retirement while also giving our small businesses and nonprofits another avenue to invest in their employees’ future financial security,” Grassley said. “Government should be doing everything it can to help Americans save more of their own hard-earned money. I’m proud to author this bipartisan bill that will help more Americans retire with peace of mind and independence.”
“No American should have to worry about affording retirement after a lifetime of hard work,” Hassan said. “That’s why I have joined my colleagues on both sides of the aisle in introducing this commonsense bill that helps expand retirement options. I will keep working to build support for this legislation and help strengthen retirement security for workers across New Hampshire.”
“Oklahoma families and employers should have greater access to retirement plans that best fit their needs,” Lankford said. “By making sensible updates to the law, this legislation makes it easier for small businesses and nonprofits to offer plans and expand access, which gives Oklahomans the freedom to save more of their money for retirement sooner.”