Currently, multiple employer retirement plans (MEPs) are available only to businesses with a 'common nexus' — the proposed 'Open MEP' model eliminates key legal barriers but would also transform the retirement industry and significantly affect every layer of the value chain. (Photo: Shutterstock)
Bipartisan support of the Setting Every Community Up for Retirement Enhancement, or SECURE Act of 2019, in the US Congress includes provisions to expand access to Multiple Employer Plans (MEPs) in a bid to make it easier for small businesses to offer retirement benefits. Under current federal law, MEPs are available only to businesses with a “common nexus” (i.e., sponsored by an industry or trade association). The proposed “Open-MEP” model eliminates key legal barriers, enabling unaffiliated businesses to combine resources, take advantage of economies of scale and lower administrative costs.
The new legislation would transform the retirement industry and significantly affect every layer of the value chain. From participants and sponsors to recordkeepers and trust companies, here's how actors across the retirement services value chain will likely be impacted.
Small-business employees
Open MEPs represent a huge boon for small-business employees. According to the most recent data from the Bureau of Labor statistics, fewer than 50% of private sector employees have access to an employer-sponsored retirement plan.
This will change if Open MEPs become reality, as these vehicles remove critical barriers, which will increase adoption.
Continue Reading for Free
Register and gain access to:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.