Issues with Mutliple Employer 401K Plans?

[Guest ebailey]

Any concerns we should be aware of about joining a MEP 401K plan? It purports to take away all fiduciary liability - I don't buy that. For example, if it is an imprudent decision to pick them as provider - we would have fiduciary duty regarding that choice.... Other than that - any other concerns regarding joining one? Issues with termination? Issues with other employers screwing up? Any thoughts?

thanks

[Jim Norman]

You are correct it does not absolve the employer of all fiduciary liability.

Also, as long as regulation section 1.413-2(a)(3)(iv) is on the books, a multiple employer plan is a dangerous place to be. This reg says that a qualification failure by any one employer results in disqualification of the entire plan for all employers.

Such a failure can arise so easily as to make it almost a certainty. A married daughter employee of a business owner is not identified as a Highly Compensated Employee, so the ADP test is incorrect. An employer leaves the plan without making a required top heavy minimum contribution, an adopting employer previously had a top heavy plan that is overlooked in determining top heavy status, etc.

Proceed with caution.

[QDROphile]

Securities law issues.

[Guest ebailey]

Anything in particular or more specific? I don't see the connection.

thanks

[QDROphile]

Go to the "Secuurities Law Aspects ..." column and you will see a relevant topic in one of the most recently updated posts. The initiator of the post is "Lizana"

[Guest ebailey]

thanks