PLANADVISER - March/April 2019 - 6

plan focus
Maximizing Growth Potential
'Open MEP' legislation could boost the number of such plans well past 2,641
I
n the eight years from 2009 through
2017, assets in multiple employer
plans (MEPs) grew 58%, from $163.5
billion to $258.2 billion, while the
number of these plans decreased from
2,810 to 2,641, according to BrightScope
data. Among the top 20 multiple
employer plans, the number of participants
covered ranged from 8,967 to
209,592, and assets ranged from $2.3
billion to $28.1 billion.
MEPs have been in existence for
many decades but only available in
what is known as a " closed " format:
They require a common nexus, such
as industry or
location, among the
employers who participate.
There is bipartisan support for
what are referred to as " open " MEPs-
aka pooled employer plans (PEPs)-
which remove that common nexus
requirement. Currently, a number
of bills in Congress-the Retirement
Enhancement and Savings Act being
chief among them-aim to pave the
way for open MEPs. If one of those bills
passes, the number of these plans
could surge.
Lawmakers and retirement plan
industry stakeholders support the idea
of open MEPs because they are less
expensive for smaller employers to
administer-resources, notably plan
administration and governance, are
pooled-and could, therefore, extend
workplace retirement savings plans to
more Americans.
In a recent webcast, Kelly Michel,
chief marketing officer for Envestnet
Retirement Solutions in San Jose, California,
said, " My personal take is that
MEPs will be the next big disruptor for
the retirement plan market. They will
impact nearly every single stakeholder. "
She said she believes employers of
every size will be attracted to open
MEPs. She contended that, among
large plans, there is little variation
in plan design. " If you're a large plan
sponsor, and 80% of your provisions
are similar to that of a MEP, you'll
Top 20 Multiple Employer Plans
1 General Electric Co.
2 National Rural Electric Cooperative Association
3 Comcast Corp.
4 Nationwide Mutual Insurance Co.
5 Dell Inc.
6 Time Warner Inc.
7 Southwest Airlines Co.
8 American Honda Motor Co., Inc.
9 ADP TotalSource Group, Inc.
10 Xerox Corp.
11 Quest Diagnostics Inc.
12 Nucor Corp.
13 Fluor Corp.
14 Anheuser-Busch Companies, LLC
15 DXC Technology Co.
16 TriNet HR Corp.
17 Emerson Electric Co.
18 Oldcastle Inc.
19 Computer Sciences Corp.
20 Board of Directors of Pentegra Defined Contribution Plan
Source: BrightScope
weigh the uniqueness of your plan
against the risk of maintaining it yourself. "
Her prediction is that, as better
MEP solutions evolve, all plan sponsors
will evaluate shifting their fiduciary
responsibility to another entity.
According to Pete Swisher, senior
vice president and national practice
leader at Pentegra Retirement
Services in White Plains, New York,
retirement plan advisers will play a
key role in convincing sponsors to
join open MEPs. Additionally, some
lobbying groups are pushing for MEP
$28,140,271,616
$10,428,296,192
$9,883,351,040
$6,017,736,192
$5,832,890,880
$5,290,699,264
$5,091,337,216
$4,486,311,424
$4,453,350,912
$4,350,906,880
$4,231,126,016
$4,027,499,520
$3,426,142,976
$3,205,647,104
$3,029,226,496
$2,759,960,832
$2,723,724,032
$2,600,411,136
$2,532,095,488
$2,272,259,328
Assets Participants
96,431
59,451
109,066
32,760
56,915
18,270
8,967
29,991
209,592
12,274
45,877
16,715
15,136
13,518
30,734
134,956
14,097
32,376
22,975
20,044
legislation that would keep the selection
of each employer's investment
lineup with that particular employer;
should this pass, advisers will play a
key role here, as well, Swisher says.
However, he adds, just one plan
adviser may be all that is needed for
a MEP, no longer individual advisers
serving individual employers; in the
same way, there may be just one
plan committee. So open MEPs could
also specifically disrupt the retirement
plan advisory industry.
-Rebecca Moore
6 | planadviser.com March-April 2019
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