In preparing this White Paper, we have worked with 401k SAFE, which is an Open MEP plan sponsor that serves employers across the country to help them mitigate their liability and compliance burdens of sponsoring a retirement plan.
Birmingham, AL (PRWEB) September 29, 2011
With the explosive interest in Open Multiple Employer 401(k) Plans (Open MEP) driven by employer concerns regarding fiduciary liability as plan sponsors, legendary ERISA attorneys Fred Reish and Bruce Ashton, Partners at DrinkerBiddle, with business input from 401k SAFE, a leading Open MEP provider, have written a white paper to bring insight and clarity to the history of MEP’s and specifically the legal premise for the existence and use of the currently popular Open MEP’s.
Commenting to The 401k Wire, Ashton sees the growing complexity of 401(k) rules, and employers' growing concerns about fiduciary responsibility and participant fees, driving the recent interest in MEPs.
“Although Open MEPs are being discussed as something ‘new’, they are clearly a continuation of the established MEP plan structure. The advantages they offer should be a consideration for any employer exploring their fiduciary and administrative options,” note Reish and Ashton from the white paper. “Open 401(k) MEPs are one of the few options available for most employers that wish to comprehensively mitigate their fiduciary responsibilities and exposure to liability, and outsource their administrative compliance burden, while providing their employees with the maximum tax-deferral opportunity afforded under the Code, as well as possible tax-deferred employer contributions for retirement. Participation in an Open 401(k) MEP can help avoid the administrative burden of overseeing compliance requirements by allowing an independent plan sponsor to oversee the servicing requirements for their participants and beneficiaries.”
Reish and Ashton also address the recent concerns over Open MEP’s complying with MEWA rules. “From an ERISA fiduciary standpoint, a MEP (including an Open MEP) can be viewed as virtually the antithesis of an abusive MEWA, in the sense that MEPs tend to enhance fiduciary compliance and the availability (to small and mid-sized employers) of professional investment advisory and other important ancillary services, while still providing full protection for accrued benefits under Code and ERISA mandates.”
“Having legal clarity regarding Open MEP’s from these highly respected attorneys will help both advisors and employers considering the value of an Open MEP for their 401(k) retirement plan,” says Lee Lichtenstein, President of 401k|SAFE, a leading provider in the Open MEP 401(k) market.
Mr. Reish and Mr. Ashton are Partners with Drinker Biddle & Reath LLP., and specialize in employee benefits law. In 2011, Mr. Reish was selected by PLANADVISER magazine as one of the 5 “Legends” of the retirement industry and with retirement advisors.
401k SAFE is a multiple employer plan sponsor that works with financial advisors to help employers across the country to eliminate the need to file a Form 5500, conduct a plan audit, or administer plan provisions, while mitigating the personal fiduciary liability as plan sponsor. To learn more about 401k SAFE, visit their website at http://www.401ksafe.com.