Even though pension risk transfer is better understood by plan sponsors, LIMRA hopes pending legislation that would open multiple employer plans to more employers will create an opportunity for greater plan access.
Tag: open MEPs
Industry sources discuss the positives from the final association retirement plan (ARP) rule, but the industry will still have to wait for progress on offering plans for employers without a common nexus.
Two-thirds of small businesses that currently do not offer a retirement plan say that they would consider doing so through an open MEP, Empower learned in a survey.
The rule will permit employers to connect with associations of employers in a city, county, state, or a multi-state metropolitan area, or in a particular industry nationwide, as well as a professional employer association (PEO), to provide retirement plans for their employees.
On the same day as the introduction of the new Retirement Security and Savings Act, the Senate Finance Committee heard from retirement industry witnesses about the need to pass numerous federal retirement reforms.
If legislation allowing for open multiple employer plans (MEPs) is passed, it will be a while before implementation, and changes it will bring will affect services and business models of nearly every stakeholder in the retirement plan industry.
The bipartisan bill, which enjoys broad industry support, would add flexibility for small businesses to join multiple employer plans, among other provisions.
Given their diverse backgrounds, the speakers shared different points of emphasis in their testimony, but they all called on the lawmakers present to embrace bipartisanship and to enact commonsense solutions.
Legislative proposals could pave the way for increased access to workplace retirement savings plans in 2019, LIMRA says.
LIMRA data shows nearly four in 10 workers say they began to save for retirement because their employer offered a retirement savings plan.
Of the 66% who responded in favor of the plans, 55% stated the likelihood of lowered costs for themselves is their top reason for supporting MEPs, while 54% said they were interested in reduced fees for employees.
"The new legislation contains language addressing key IRI concerns including providing retirement plan participants with an illustration of how current savings would translate into an income stream in retirement and enhancements to automatic enrollment and contribution escalation features in retirement plans,” says Cathy Weatherford, president and CEO of the Insured Retirement Institute.
Industry stakeholders disappointed the proposal does not address open MEPs can take heart in the fact that DOL staff are calling for commentary on ways the proposal could be expanded, including into the area of open MEPs.
If the DOL’s proposal closely follows President Trump’s executive orders, it is likely to revise the “common nexus” and “one bad apple” rules that have held back open multiple employer plans.
Before the House passed the Family Savings Act, leadership added the Senate’s annuity selection safe harbor provision from RESA, potentially increasingly the appetite for compromise legislation.
One of three bills introduced this week as part of “Tax Reform 2.0,” the Family Savings Act includes many of the provisions written into the popular RESA legislation.
President Trump on Friday called on the Department of Labor to consider the pros and cons of allowing small businesses to jointly offer retirement plans (open MEPs).