On August 31, President Trump signed an executive order designed to make it easier for smaller businesses to band together and offer retirement plans to employees. The order directs the Departments of Labor and Treasury to propose regulations allowing unrelated businesses to offer “association retirement plans” by relaxing the requirement that small business have a common interest to form a multiple employer plan, or open MEP. These plans are retirement vehicles designed for small, nonunion employers and shouldn’t be confused with multiemployer pension plans. The idea is similar to association health plans, which received a regulatory boost in June when DOL finalized a rule to make it easier for small businesses to join groups or associations to offer insured health coverage in the large group market at potentially more favorable pricing with less restrictive requirements.
The order also urges the Labor and Treasury Departments to consider ways to reduce paperwork and administrative burdens that might prevent businesses from offering retirement savings plans and makes a request that the Treasury Department explore lowering minimum required distributions for 401(k)s or individual retirement accounts so retirees can continue saving for a longer period of time.
For more information, contact Jim Young at [email protected] or 202-547-0133 or Claiborne Guy at [email protected] or 703-837-5382.
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