MEP: 1 of 3 Retirement Security Options

Multiple Employer Plans

We think of the Road Runner when we read the acronym for multiple employer plans (MEPs – get it?). In reality, MEPs are just state-administered retirement programs that allow groups of employers to create joint retirement savings programs structured like 401(k) plans.

While any individual employer in a MEP may be too small to offer its own retirement plan for workers, a group of employers is not.

MEPs have the advantage of reducing the administrative costs for each individual employer through economies of scale, but are entirely voluntary for employers.

Another advantage of MEPs is they can be structured to comply with ERISA (a federal law governing minimum standards for pension plans like MEPS. Wile E. Coyote, maybe?), which allows participating employers and employees, to make contributions, if desired.

In most cases, MEPs can only be formed by groups of employers that are all within one industry or economic sector. So forget about hooking up with your favorite sports team if you work at a fast food restaurant.

Vermont and Massachusetts created MEPs for their residents. The Massachusetts CORE Plan is a state-managed multiple employer plan serving small nonprofit organizations. The Green Mountain Secure Retirement Plan in Vermont has not yet launched. But a cool program name, no?

Want Pennsylvania to structure its retirement savings program as a MEP? Call your lawmakers and tell them.