Frequently Asked Questions.
Here are some common questions about MEP 401k.
What is a MEP 401k?
A Multiple Employer Plan or MEP is a 401k plan allowing multiple businesses to participate in a single retirement plan. Under the Internal Revenue Code section 413(c) unaffiliated companies are allowed to group together under one 401k plan. This arrangement allows for a small employer to take advantage of economies of scale by combining with many other small employers to access pricing and features typically found in larger 401k plans.
Is a MEP 401k new?
Multiple Employer Plans are nothing new, they have been around for years. Closed MEPs have traditionally required employers to have commonality, but recent changes in regulations have allowed for Open MEPs. Open MEPs allow businesses with nothing in common to benefit from joining a MEP.
Who can join a MEP?
Any employer wanting to reduce expenses and fiduciary liability can join the MEP. Companies just starting a plan or companies with millions of dollars can benefit from joining a MEP.
Can I customize my MEP 401k?
Yes, each adopting employer may customize plan design to accomodate the individual goals of each employer. Employers may choose eligibility, vesting, matching options, including Safe Harbor variations. Profit sharing components using pro-rata allocations, social security integrated formulas and cross-tested formulas may be added.
Can I integrate payroll?
Yes, many national and local payroll providers are available. Please contact us to find out if your payroll provider is available.
What is a 401k fiduciary?
The Employee Retirement Security Act (ERISA) defines 3 different fiduciary roles in any 401k plan, the 3(21) Named Fiduciary, 3(16) Administrator, and 3(38) Investment Manager. The plan fiduciary accepts all the liability for the administration, investments and expenses in the 401k plan. Through a breach of fiduciary duty a plan fiduciary can be personally liable for unreasonable plan expenses or poor investments.
Who is the fiduciary under the MEP?
Not you, which is one of the biggest benefits of a MEP. Foresight Wealth Management assumes the role of the 3(21) Named Fiduciary, 3(16) Administrator, and 3(38) Investment Manager.
Who is Foresight Wealth Management?
Foresight Wealth Management is Registered Investment Advisor. As an RIA, we do not accept commissions, we are committed to acting in the best interest of our clients and providing conflict free advice. With these ideals in mind, Foresight sponsored a MEP 401k to better serve our clients. Our Foresight MEP is designed to help small business owners lower the cost, reduce the time, and remove the liability of running a corporate retirement plan.
How do I get started?
Simply contact our office today, we can provide a proposal and answer any questions you might have.