Individual employer-sponsored retirement plans can be complicated, risky, and costly to manage, particularly for small businesses. Because of this, WVBankers identified a need to provide member banks, predominantly small- to mid-sized banks, a “turn-key” group retirement solution that includes comprehensive administrative and investment support. With the assistance of Metro Benefits as our ERISA Section 3(16) third-party administrator and Graystone Consulting, a business of Morgan Stanley, as our ERISA Section 3(38) investment manager, the Association began marketing a multiple employer plan or MEP that would allow banks that desired to join under a single plan, the ability to offer high-value retirement benefits to their employees with less burden and worry.
Under a MEP structure, the plans of multiple banks would be combined under a single plan. The Association would make most of the fiduciary decisions and assume most of the risk as the plan sponsor, but the risk would be shared with our ERISA third-party service providers. Participating banks would join the MEP through participant or joiner agreements that can be tailored to fit their needs. As a single plan, the MEP would have one plan document, one 5500 filing, one plan-level audit, and one investment lineup.
Recognizing the need to assist small businesses and their employees, Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which was signed into law on December 20, 2019. The SECURE Act includes several provisions that impact group retirement plans, including the creation of a new type — the Pooled Employer Plan, or PEP. A PEP is a type of MEP, but without the requirement of all businesses sharing a commonality.
When WVBankers launched the concept of a MEP a couple of years ago, we selected MassMutual as the recordkeeper. MassMutual was acquired by Empower Retirement earlier this year. As the second largest retirement service provider in the country, Empower continues to invest in technology and new capabilities that deliver state-of-the-art solutions and user-friendly experiences. Following the passage of the SECURE Act, Empower expanded its retirement plan solutions, which allows WVBankers to deliver a solution that best fits the needs of our member banks.
One of these solutions is a MEAP or a multiple employer aggregation plan. The key difference from a MEP is that the joining banks maintain their own single plan and are not grouped into one large plan with other participating banks. The adopters continue to sponsor their own plans and WVBankers acts as an endorser. Like the MEP, this solution aggregates services to create efficiencies and brings in Metro Benefits and Graystone Consulting as the administrative and investment fiduciaries to oversee many operational and fiduciary tasks of the program and its adopting plans. The MEAP solution would also have one investment lineup, but each individual plan would have its own plan document and complete its own 5500 filing and plan audit, if required, through our third-party administrator.
Both the MEP and MEAP solutions are beneficial for banks who want to take advantage of collective purchasing power, a reduction in administration time, and less fiduciary responsibility and risk. Additional benefits include:
- Individual retirement plan features that work best for your organization.
- Less time spent on retirement plan administration and more time focused on your organization’s goals.
- A high-value, competitive benefits package that can help you attract and retain top talent.
- Access to leading retirement plan service providers to navigate an increasingly complex legal and regulatory environment.
- Expert investment selection and fiduciary protection from a leading independent firm.
In addition to offering tangible benefits to your bank, the WVBankers group retirement solution is in your employees’ best interest. With our solution, your employees will receive a dedicated team of retirement advisors, who will make their retirement planning experience more personalized, more accessible, and easier to understand. Our tools and helpful resources will ensure your employees are more fully engaged in reaching their retirement goals.
Representatives are happy to meet with you to discuss how a group retirement solution is an effective way to manage your 401(k) duties and responsibilities, mitigate your fiduciary risk, and experience potentially favorable pricing. If you would like to learn more about our group retirement plan, please contact me directly at (304) 343-8838 or firstname.lastname@example.org.