5. Considerable authority for Labor to craft disclosure requirements and model plans.

The full nitty-gritty of what Open MEPs would look like is not addressed in the legislation—the bill tasks the Labor Department to figure that out.

It does say that MEP providers would have to register with Labor, and that each provider would be required to name itself as the plan fiduciary in writing.

But Labor would define employers' monitoring and disclosure requirements, as well as providers' oversight and disclosure requirements. The bill also provides the choice of communicating electronically with plan participants.

Labor is also instructed to develop model plan language for MEP providers.

1. No common interest required for pooled employer plans.

The bill removes the existing commonality requirement for employer participation in a Multiple Employer Plan. Under an Advisory Opinion issued by the Labor Department in 2012, MEPs that do not adhere to the commonality requirement are not considered a single plan. The Family Savings Act removes that requirement—an action lawmakers across the aisle have been telegraphing for several years.

Importantly, the proposed law still holds each single employer in a MEP as a fiduciary over the portion of its employees represented in a plan. Separate legislation recently introduced by Sen. Tom Cotton, R-AK, would have effectively removed fiduciary status from employers in MEPs.

Employers would still bear fiduciary selection and monitoring requirements of MEP providers and other plan service providers. (All photos: Shutterstock)

2. "One bad apple" rule gone.

Without actually using the metaphor, the bill removes the "one bad apple" rule, a provision in the tax code that disqualifies a MEP—and all of the participating employers—from tax-preferred status if one employer fails compliance requirements.

Under the new bill, the failures of a single employer would not disqualify the MEP. The non-compliant employer in question would be liable for consequences to plan participants.

Again, there was little surprise here. Lawmakers have called on the rule's removal from the tax code, citing it as a hurdle to MEP participation. Incidentally—or not--the IRS has a very limited record of actions against MEPs under the one bad apple rule.

3. Labor given discretion to forgive compliance snafus.

In the event of a compliance failure by a sponsor or a MEP provider, the bill gives the Labor Department discretion to determine if the action was a mere oversight, or a willful act that demonstrates a lack of commitment to compliance over a continued period of time.

In either case, Labor would have the authority to determine if continued participation in the MEP by an employer would be in the best interest of participants.

4. Simplified annual reporting and electronic communications.

The bill gives the Labor Department power to craft regulation simplifying annual reporting requirements for any pension plan with fewer that 100 participants.

And it does the same for MEPs with less than 1,000 participants, so long as each employer brings fewer than 100 participants to the pooled plan.

5. Considerable authority for Labor to craft disclosure requirements and model plans.

The full nitty-gritty of what Open MEPs would look like is not addressed in the legislation—the bill tasks the Labor Department to figure that out.

It does say that MEP providers would have to register with Labor, and that each provider would be required to name itself as the plan fiduciary in writing.

But Labor would define employers' monitoring and disclosure requirements, as well as providers' oversight and disclosure requirements. The bill also provides the choice of communicating electronically with plan participants.

Labor is also instructed to develop model plan language for MEP providers.