In recent years, one of the retirement industry’s white whales has been multiple employer plans (MEPs). Countries like Australia have long allowed employers to participate in retirement savings vehicles that are not sponsored by each individual employer but that are instead sponsored by a third-party entity. Many academics, service providers, and employers have viewed MEPs as a way to increase access and reform the retirement savings market by reducing the administrative burden on small employers that want to offer retirement plans and potentially offering reduced costs to employees of small companies by allowing them to take advantage of economies of scale in professionally managed plans.
With the passage of the SECURE Act, you may be considering sponsoring this new type of MEP, the pooled employer plan (PEP). If you are, there are five things to know now.
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