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If you're responsible for running a company, you have to do alot of things you aren't particularly interested in (and often noteven good at doing). For example, someone's got to clean thebathrooms. someone's got to do the bookkeeping and file the taxesevery year. Company executives often hire specialists for thesefunctions.

It turns out among those uninteresting things you'll also findthe firm's retirement plan. Pension and traditional profit-sharingplans are one thing. But 401(k) profit-sharing plans really set thebar high in terms of inconvenience.

It's easy to understand when, given the choice between closinganother sale and hosting a 401(k) enrollment meeting, you knowwhich option the CEO prefers (see "Exclusive Interview: Pete Swisher Explains WhyCompanies Don't Care About MEPs (or PEPs or Even 401k Plans),"FiduciaryNews.com, February 19, 2020). If it's not generatingrevenue, then, whatever it is, it's a distraction.

But it's a necessary distraction. In order to compete for thebest employees, companies need to offer attractive compensationpackages. It's not just that a company is expected to provideemployees with 401(k) plans. They must also provide the bestmatching, the best performing, and the best features in those401(k) plans.

In the worst of all possible situations (at least from the pointof view of the plan sponsor), corporate executives must spendvaluable time becoming and maintaining their status as retirementplan experts. Anything less and they'd unknowingly andunnecessarily expose themselves to fiduciary liability.

This is where 401(k) MEPs can please 401(k) plan sponsors.

The short answer to our headline is "yes." Companies need 401(k)plans to entice superstar workers to stay working at their company.It's even better if these 401(k) benefits are as close to "best inclass" as possible.

When you think "best in class" of anything, you usually picturesomething that has a lot of money behind it. So, too, with "best inclass" 401(k) plans. They're usually found at the largest companiesfor one simple reason: large companies have the critical mass.Their 401(k) plans are large enough to generate enough raw dollarsin fees as to afford the very best but at only a small fraction ofthe percentage paid by small plans for the same purpose.

What it really comes down to is value. In order for 401(k) plansto offer "best in class" value, those plans need to be of a certainsize, otherwise it's too expensive to be "best in class."

n the face of it, 401(k) MEPs can seemingly solve this economyof scale challenge. And that may have been true – before the SECUREAct.

Prior to the SECURE Act, the only practical way to furnish a401(k) MEP was through a business association. The SECURE Act,however, created a variant of the MEP called a PEP ("PooledEmployer Plan"). The PEP allows unrelated businesses (think"everybody") to be placed in a single 401(k) plan.

In general, business associations, especially those coveringnational or large geographical footprints, already have the organiccritical mass of membership required for their 401(k) MEPs tosustain a "best in class" rank. With PEPs, that's not guaranteed.In fact, for the most part, all PEPs will begin with zeromembers.

Here's the significance of that. Business Association MEPs needonly convince existing members to join the MEP. These existingmembers have already made a positive decision to join theassociation in the first place. The threshold to join theassociations MEP is therefore lower.

For PEPs, on the other hand, participating companies will, ineffect, be required to make two leaps of faith. First, they'll needto agree they want to join the club whose other members can beanyone. Second, they'll have to agree to participate in that club'sPEP.

Remember what they say about selling online. The more clicks aprospective buyer has to make, the less likely the sale.

Prospective members of association MEPs only need to make oneclick. PEP prospects need to click twice.

You do the math.