MEP Proposed Rulemaking
Department of Labor
On July 31, 2019, the Employee Benefits Security Administration, Department of Labor (DOL), issued a Request for Information regarding the definition of “employer” in section 3(5) of the Employee Retirement Income Security Act of 1974, as amended. According to the DOL, the RFI is in response to public comments submitted for the proposed rule in October 2018 (see next bullet for details) and could serve as the basis for future rulemaking. The RFI will be open for comments for 90 days.
In addition, on July 31, 2019, the Employee Benefits Security Administration, Department of Labor, published final rules of “Definition of ‘Employer’ Under Section 3(5) of ERISA-Association Retirement Plans and Other Multiple-Employer Plans.” The regulation addresses when a group or association of employers or PEO falls within the definition of “employer” under ERISA section 3(5) for purposes of sponsoring a MEP under title I of ERISA to cover the employees of member employers.
- See the Department of Labor’s fact sheet and news release on the final rule.
- The proposed rules were issued on October 23, 2018 and were open for public comments until December 24, 2018. On December 21, 2018, CRI submitted comments to the U.S. Department of Labor regarding this proposed rule. Click here to view the letter. All public comments can be viewed here.
- Court Ruling on Association Health Plans Leaves Future of DOL MEP Rule in Doubt (Groom Law Group, April 2019)
The District Court of Washington, D.C. ruled that portions of the U.S. Department of Labor’s rule relating to the definition of employer related to Associated Health Plan undercut the Affordable Care Act. Because the definition of employer for MEPs under ERISA is similar to that of employer for Associated Health Plans, there is concern that a court may similarly block U.S. Department of Labor’s s new MEP rule.
- Department of Labor Proposes Multiple Employer Plan Expansion (Groom Law Group, October 2018)
The U.S. Department of Labor proposed rules that clarify which organizations can sponsor MEPs as defined by ERISA section 3(5). The impact on state-run MEPs is unclear, as the proposed rules do not explicitly mention them.
On July 3, 2019, the Internal Revenue Service, Department of the Treasury, issued a notice of proposed rulemaking related to the tax qualifications of multiple employer plans. Proposed regulations would provide an exception to the “unified plan rule” if one employer fails to satisfy a qualification requirement or fail to provide information used to determine compliance with such requirements. Comments and requests for a public hearing must be received by October 1, 2019.
- IRS Proposed Rule Offers Relief to The Multiple Employer Plan One Bad Apple Rule (Groom Law Group, August 2019)
- Summary of the Employee Retirement Income Security Act. Click here to learn more.
- Retirement Plans and ERISA FAQs. Click here to learn more.
- ERISA – Title 29 of the Code of Federal Regulations. Click here to learn more.
- U.S. Department of Labor Marks ERISA’s 40thAnniversary. Click here to learn more.
View Recent DOL ERISA Advisory Council Reports:
- 2018 Topic: Lifetime Income Solutions as a Qualified Default Investment Alternative (QDIA) – Focus on Decumulation and Rollovers
- “Mandated Disclosure for Retirement Plans – Enhancing Effectiveness for Participants and Sponsors” (November 2017)
- “Participant Plan Transfers and Account Consolidation for the Advancement of Lifetime Plan Participation” (November 2016)
- “Model Notices and Plan Sponsor Education on Lifetime Plan Participation” (November 2015)
- “Model Notices and Disclosures for Pension Risk Transfers” (November 2015)
- “Issues and Considerations Surrounding Facilitating Lifetime Plan Participation”(November 2014)
- “Outsourcing Employee Benefit Plan Services” (November 2014)
CRI Policy Reports
- Multiple Employer Plans: An Overview of Legal, Regulatory and Plan Design Considerations for States. Click here to learn more about how ERISA and other laws apply to MEPs.
- Review of Potential Public Retirement Plan Options for Private Sector Employees/Employers in the State of Vermont. Click here to learn more about how ERISA and other laws apply to retirement plan design options.
- State Initiatives to Expand the Availability and Effectiveness of Private Sector Retirement Plans: How Federal Laws Apply to Plan Design Options. Click here to learn more.