Beginning in 2021, small-business clients will have even more options for providing retirement benefits to employees. The Secure Act removed the commonality of interest requirement that previously limited multiple employer plans (MEPs) to business owners who shared the same geographic location or industry—creating a new type of MEP. Under the Secure Act, employers will be able to offer MEPs, association retirement plans (ARPs) and pooled employer plans (PEPs).

While it can be generally said that ARPs and PEPs are simply expansions on the MEP, small business clients who wish to explore options for joining with other businesses to offer retirement benefits should understand the nuances of all three structures before jumping into the MEP pool.

Multiple Employer Plans (MEPs): The basics

Historically, to participate in MEPs, all participating employers were required to share some strong type of common interest separate and apart from the retirement plan itself. The need to share some type of affiliation or participate in the same industry sharply limited the availability of the "original" MEP—also called a "closed" MEP.