Wasting no time, the Labor Department has delivered its proposed rule to expand access to multiple employer retirement plans to the Office of Management and Budget for review.
It was less than a month ago that President Trump signed an executive order directing the Departments of Labor and Treasury to consider changes to make it easier for businesses to join together to offer MEPs, which the order referred to as Association Retirement Plans (ARPs).
The President, in announcing the executive order, noted that ARPs reduce the cost of offering retirement plans for businesses that join together by expanding the number of workers who participate. Secretary of Labor Alexander Acosta further noted that high costs are holding back small businesses from offering workplace retirement plans, and that workers at small businesses often have less access to workplace retirement plans compared to workers at larger businesses.
In that executive order the Secretary of Labor is directed “within 180 days of the date of this order” to consider whether to issue a notice of proposed rulemaking, other guidance, or both, that would clarify when a group or association of employers or other appropriate business or organization could be an “employer” within the meaning of section 3(5) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1002(5), and by the same point in time, “consider proposing amendments to regulations or other guidance, consistent with applicable law and the policy set forth in section 1 of this order, regarding the circumstances under which a MEP may satisfy the tax qualification requirements set forth in the Internal Revenue Code of 1986, including the consequences if one or more employers that sponsored or adopted the plan fails to take one or more actions necessary to meet those requirements.”
While the particulars of the proposal are not yet known, the quick delivery to OMB might suggest that the review might also be quick. That said, the OMB must approve the proposal before it goes up for public comment, a process that could take days or weeks.
Stay tuned for more information.