A new Department of Labor rule that goes into effect Sept. 30 makes it easier for small businesses to join with others to offer multiple-employer 401(k) plans. The hope is that by gaining scale to bring down costs, more small employers will offer plans.
A new Department of Labor rule that goes into effect Sept. 30 makes it easier for small businesses to join with others to offer multiple-employer 401 plans.Currently, nearly 40 million Americans do not have a workplace retirement plan.that Americans use to save and invest for their retirement, but it's expensive and complicated for companies to provide a 401 plan.
"This is a way to expand retirement plan coverage in the United States," says Richard Rausser, senior vice president of client services at Pentegra, a provider of retirement planning and fiduciary outsourcing solutions.who don't currently offer retirement benefits, or have plans to put one in place, say they would consider joining an MEP.The rule allows a group or association of employers in the same industry or the same geographic location to form an MEP.
"Associations are always looking at things they can do for their members," he says. "If they can do something for their members that makes it more effective for their members to offer a retirement plan, then they're going to do that.", offering a 401 benefit could make small businesses more competitive when it comes to attracting top talent.
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