one bad apple in a mep

[TPApril]

in practice, how often has there been a bad apple that has disqualified a multiple employer plan that was not able to be fixed by one of the correction programs?

[MoJo]

It depends on what you mean by "one bad apple." Keep in mind the IRS has no problem with "open" MEPs, and hence under their rules you should have the ability to use any IRS corrective measures if a problem arises under the areas under IRS jurisdiction. The DOL does not believe "open" MEPs are legitimate (as they have historically been offered - although there are "new" variants that arguably solve the DOL's concerns) and hence, there may not be an appropriate fix under any program offered by the DOL. Primary among the DOL's concerns are abdication of PLAN SPONSOR fiduciary responsibilities - which - even if you hire appropriate 3(38) and 3(16) fiduciary services - never actually goes completely away (i.e. duty to monitor, and fire/replace when necessary). If one member of a MEP fails in its fiduciary duties, under "current" DOL analysis, that would take down that plan sponsor - but arguably not impact the other plan sponsors (who the DOL views as sponsoring "separate" plans. If one plan sponsor does something "universal" (and I can't think of what that might be except something perhaps that affects the assets "belonging" to the participants of another participating employer), then there would be a problem that could affect the whole....

P.S., I've not seen any such problems - except DOL scrutiny when an employer has participated in a MEP. Problems I've seen often however, include scenarios when a plan sponsor leaves the MEP (or the MEP is shut down as a MEP but the "plans" continue independently, and then there is a gap in history from a Form 5500 perspective, and the inability to actually get information from the (defunct) MEP when a plan is audited.