Have you heard people talking about Multiple Employer Plans? Are you curious as to what these are? This series of blog posts will help you understand the terminology and the benefits of offering Multiple Employer Plans for your business.
Let’s start with some relevant terms:
Multiple Employer Plan (MEP): A retirement plan for businesses that typically have
a common interest, but are not commonly owned or affiliated.
Multiple Employer Plan Sponsor (MEP Sponsor): The organization that sponsors and maintains the MEP and master contract under which adopting employers may adopt a retirement plan; An example of organizations that may sponsor an MEP include a professional employer organization (PEO), or a professional association.
Adopting Employer: The term used to describe an employer that participates in an MEP.
A few Advantages of Multiple Employer Plans:
- MEP’s offer great potential as a savings option for small-business owners who want to provide their employees the same flexible features and benefits of a traditional 401(k) plan.
- If you are a small businesses you probably have a unique retirement plan-related needs, and very different concerns about the cost of administering a retirement plan than a larger company, therefore, a MEP would be very beneficial.
- The MEP structure also offers flexibility for small business owners to remain in this plan construct or to easily graduate to a stand-alone plan when they are ready.
If you are interested in Multiple Employer Plans it’s important to contact your Employee Benefit Adviser.
Stay tuned for the next blog with more information on MEP’s.
Resource: TRANSAMERICA Retirement Services