Much Ado About Nothing: DOL issues new MEP guidance

Six years ago, the Department of Labor (DOL) pretty much killed off what we called Open Multiple Employer Plans (MEPs) by saying that MEPs, where there was no commonality between adopting employers, wouldn’t be considered a single plan for ERISA (and Form 5500) purposes.

It pretty much killed off Open MEPs because the big selling point is that they wouldn’t require an adopting employer to complete their own Form 5500. Six years later, the DOL issued no guidance that expanded their ideas concerning what would constitute an effective Open MEP since their advisory opinion that was only specific to one Open MEP.

President Trump’s executive order a few months back that directed the DOL to issue MEP regulations gave many in this industry the idea that the DOL would allow Open MEPs, eliminate the one bad apple rule, and allow plan providers to perhaps sponsor a MEP.

Well, the proposed rules that the DOL just published offered pretty much nothing. While it offered more guidance on how associations and professional employer organizations (PEOs) could sponsor MEPs, it did nothing with its restriction on requiring commonality among adopting employers. So the door for Open MEPs remains closed.

What’s next? The DOL could further expand their proposed rule or Congress could bring back Open MEPs through legislation. Otherwise, we’re pretty much where we were at in 2012.

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