If you don't know what a 401(k) MEP is, you need to find out. If you're running a business, you really need to find out.
Remember when you were a kid and you wanted that piece of candy that cost 45 cents, but you only had 40 cents? Then you discovered if you bought a package of five, the cost per piece was only 35 cents. All you needed was to find four other friends with 40 cents. You could then pool your money and buy the package, enabling each of you to enjoy that candy for a “reduced” cost.
Ah, the classic advantage of economies of scale. On the most superficial level, pooling together the 401(k) plans of different firms presents this same benefit. The larger the plan, the better able it will be to negotiate more favorable terms with the various third party service providers. But 401(k) MEPs offer much more than lower expenses — to both plan sponsors and plan participants.
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