If you don't know what a 401(k) MEP is, you need to find out. If you're running a business, you really need to find out.
Remember when you were a kid and you wanted that piece of candy that cost 45 cents, but you only had 40 cents? Then you discovered if you bought a package of five, the cost per piece was only 35 cents. All you needed was to find four other friends with 40 cents. You could then pool your money and buy the package, enabling each of you to enjoy that candy for a "reduced" cost.
Ah, the classic advantage of economies of scale. On the most superficial level, pooling together the 401(k) plans of different firms presents this same benefit. The larger the plan, the better able it will be to negotiate more favorable terms with the various third party service providers. But 401(k) MEPs offer much more than lower expenses — to both plan sponsors and plan participants.
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
