MEP (multiple employer program) is an employer-financed retirement program that is part of industry related to 401k. Therefore, 401k MEPs are groups of unrelated employers working together to achieve the same goals towards retirement (Unrelated employers refer to those employers without any conflict interests like shared ownership)
MEP is designed for employers joined together by a mutual goal- retirement program. And that is why industry associations with an existing established relationship are suitable for MEPs. But can an established relationship between employers of the industry be the best indicator of a successful MEP program?
Indicators of successful MEPs
- BONA FIDE- in good faith
A shared mutual connection helps employers establish a common ground- perfect condition to set up an MEP plan. And a mutual connection is created on the basis of good faith, which implies that each employer is willing to share information and anything that will benefit the plan.
From the regulator viewpoint, you qualify for Bona Fide if your organization votes on a collaborative issue like employee’s education or if your staff manages everyday things like publications or events together.
- Organization’s growth
Organization growth is a good indicator of a fruitful retirement plan, and only 401k MEPs can provide that. Every business(employer) is always thinking about growth- expanding employee’s base, increasing profits and ultimately improving retiree’s life. However, achieving all those goals is difficult if you are working alone. What if you find a platform that will help you table all your goals? 401k MEPs are excellent incentives for employers wishing to build on whatever they have or expand their services.
Benefits of successful 401k MEP plan
After looking at the indicators of successful MEP plans, it is essential to highlight what an employer is likely to gain after joining a flourishing 401k MEPs.
Transfer of statutory liabilities
This is one of the key reasons why organizations prefer MEPs to traditional employer-sponsored retirement plans—the service provider (MEPs providers) coordinate with an existing organization, to offer all MEP services (documentation, financial advice, tax requirements etc.). Furthermore, if employers shift all their work to a service provider, they will escape the statutory liability tied on traditional retirement plans.
Increased power to negotiate
Two heads are better than on, and that is why bringing all your employers to a single retirement program can help you deliver healthy decisions. Attaining economies of scale is an outcome of such decisions.
Reduces administrative burdens
401k MEPs are designed for multiple employers who participate in a single retirement plan. Henceforth, the plan helps employers to spread their day to day administrative responsibility across the plan. Furthermore, there are service providers who take care of specific administrative responsibilities, such as tax compliance. And service providers help employers create more time to focus their growth hence increasing their profit.
401k MEPs helps employers reduce their administrative burdens and enjoy financial benefits from economies of scale. In addition, indicators of a successful MEP program are projected growth from successful Bona Fide operations.
