On Oct. 23, the U.S. Department of Labor issued a proposed rule that would allow small and mid-sized businesses to band together and offer 401(k) plans to their employees through Association Retirement Plans.
According to a DOL news release, the proposal, officially titled “Definition of an ‘Employer’ Under Section 3(5) of ERISA–Association Retirement Plans and Other Multiple Employer Plans,” would allow Association Retirement Plans to be offered by associations of employers in a city, county, state or multi-state metropolitan area or in a particular industry nationwide. Additionally, association plans could be sponsored through Professional Employer Organizations, which are human resource companies that contractually assume certain employment responsibilities for their client employers.
The proposed rule comes from President Trump’s Executive Order 13847 on “Strengthening Retirement Security in America,” which ordered the U.S. secretary of labor to allow more small and mid-sized businesses to adopt multiple employer plans as a workplace retirement option.
The EO also required the secretary to issue a proposal or guidance on expanding access to MEPs for part-time workers, sole proprietors, working owners and other entrepreneurial workers with non-traditional employer relationships.
The period for public comment on the proposed rule ends Dec. 24, 2018.