[UPDATED Aug. 31, 4:30 p.m. ET]
The retirement industry is all abuzz about President Trump’s appearance in Charlotte tomorrow – and about what might be the subject of that executive order “strengthening retirement security in America.”
While it’s just speculation at this point, published reports have focused on the prospect of promoting so-called “open” multiple employer plans, or MEPs, as a key means of expanding access to workplace retirement savings plans.
The open MEP is, of course, a concept that has received bipartisan support on Capitol Hill, and of which the American Retirement Association has been largely supportive, viewing it as a device that could broaden coverage by encouraging employers to offer a plan.
What makes it an “open” MEP? Well, a major barrier to allowing more employers to pool their employees together in a single 401(k) plan is the requirement that the employers have a “common nexus,” and removing that requirement could certainly expand the opportunities for small businesses offering plans. Another concern has been what’s called the “One Bad Apple” rule that puts participating employers in a MEP at risk for the non-compliant acts and omissions of other employers in the MEP and subsequent potential disqualification of the entire plan by the IRS.
Previous bipartisan legislative proposals (see House Bill Seeks to Help Small Businesses Offer Retirement Plans and MEPs Resurface as ‘PEPs’ as Senate Finance Approves New Retirement Bill) regarding open MEPs would address both those issues, including the Retirement Enhancement and Savings Act (RESA).
So, will it be MEPs? Or might it be more? Stay tuned – this could be interesting.
UPDATE: President Trump signed the executive order Friday afternoon, Aug. 31. Click here for more details.
