Bill to expand MEPs to 403(b) plans introduced

Ary Rosenbaum

Ary Rosenbaum - The Rosenbaum Law Firm P.C.

I rarely talk about legislation because so many bills over the years get proposed with zero action by Congress. It took more than 4 years for Roth 401(k) plans to be a thing. However, I want to take time to talk about something near to my heart.

The Improving Access to Retirement Savings Act—introduced by Senate Finance Committee Chairman Chuck Grassley (R-IA) along with Sens. Maggie Hassan (D-NH) and James Lankford (R-OK)—would expand multiple employer plan (MEP) access to 403(b) plans. It would also clarify that small employers that join a MEP (including a pooled employer plan) may take the small employer pension plan start-up credit for their first three years in a MEP, regardless of how long the MEP has been in existence.

403(b) plan MEPs were never really a major thing because the Internal Revenue Code didn’t say they were allowed and didn’t say they were disallowed, so almost all providers never pursued that road. 403(b) plan MEPs are a terrific idea that are poorly handled by many plan providers because of the non-ERISA flavor of most of them, which means they are loaded with high fees. Most of the worst run non-ERISA 403(b) plans are public school district plans and hopefully, this type of legislation, if enacted, could offer relief to ERISA and non-ERISA 403(b) plan participants.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ary Rosenbaum, The Rosenbaum Law Firm P.C. | Attorney Advertising

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Ary Rosenbaum

The Rosenbaum Law Firm P.C. on:

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