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Your members need to be in related industries or trades, or have a principal place of business in the same region that does not exceed the boundaries of a single state or interstate “metropolitan area,” even if the metropolitan area includes more than one state.
What qualifications do my members need to participate in a multiple employer plan?
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Want to offer a multiple employer plan to your members?
Here are 5 frequently asked questions:
What qualifications do my members need to participate in a multiple employer plan?
How does the multiple employer retirement plan work in practice?
How will our plan be treated under the Employee Retirement Income Security Act (ERISA)?
What are members’ fiduciary responsibilities within the multiple employer plan?
What about the “one-bad-apple” rule?
Your organization acts as the plan’s sponsor, while your members join the plan through participation agreements. While the primary structure of the plan is adopted by all participating employers, variations on certain plan features are included in an adoption or participation agreement.
How does the multiple employer retirement plan work in practice?
A multiple employer plan is treated as a single plan under ERISA. Only one Form 5500 must be filed, and only one fidelity bond must be purchased covering the aggregated plan assets. Beginning in 2021, multiple employer plans will not need to have an annual plan audit if the total participant count is less than 1,000 and each participating employer has less than 100 participants.
How will our plan be treated under the Employee Retirement Income Security Act (ERISA)?
Most fiduciary responsibility resides with the plan’s sponsor, such as choosing and monitoring the plan’s investment alternatives, Form 5500 filings and sending out required participant communications. All other participating members’ responsibilities may be limited to deciding to join the plan, depending on how the participation or adoption agreement is structured.
What are members’ fiduciary responsibilities within the multiple employer plan?
This former regulation held that all of the member employers of a multiple employer plan were responsible for the disqualifying actions of any of the others. The SECURE Act eliminated the “one-bad-apple” rule for plan years beginning in 2021, clearing the way for greater multiple employer plan adoption.
What about the “one-bad-apple” rule?
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Your members need to be in related industries or trades, or have a principal place of business in the same region that does not exceed the boundaries of a single state or interstate “metropolitan area,” even if the metropolitan area includes more than one state.
This former regulation held that all of the member employers of a multiple employer plan were responsible for the disqualifying actions of any of the others. The SECURE Act eliminated the “one-bad-apple” rule for plan years beginning in 2021, clearing the way for greater multiple employer plan adoption.
What about the “one-bad-apple” rule?
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Your organization acts as the plan’s sponsor, while your members join the plan through participation agreements. While the primary structure of the plan is adopted by all participating employers, variations on certain plan features are included in an adoption or participation agreement.
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Most fiduciary responsibility resides with the plan’s sponsor, such as choosing and monitoring the plan’s investment alternatives, Form 5500 filings and sending out required participant communications. All other participating members’ responsibilities may be limited to deciding to join the plan, depending on how the participation or adoption agreement is structured.
What are members’ fiduciary responsibilities within the multiple employer plan?
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A multiple employer plan is treated as a single plan under ERISA. Only one Form 5500 must be filed, and only one fidelity bond must be purchased covering the aggregated plan assets. Beginning in 2021, multiple employer plans will not need to have an annual plan audit if the total participant count is less than 1,000 and each participating employer has less than 100 participants.
How will our plan be treated under the Employee Retirement Income Security Act (ERISA)?
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How does the multiple employer retirement plan work in practice?
What qualifications do my members need to participate in a multiple employer plan?
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