Association MEP Eligible Employer

[Purplemandinga]

An Association MEP exists of businesses that operate stores of a certain retailer. These stores sell products. One of its participating employers is in a controlled group with a business that cleans pools as a service but is not a member of the retail association that sponsors the MEP and couldn't be a member based on the association bylaws.

Would the fact that a controlled group exists and the plan document automatically pulls in related group members allow this pool cleaning business to participate in the MEP that it otherwise wouldn't be eligible to participate in? Is anything violated by allowing this?

[FORMER ESQ.]

20 hours ago, Purplemandinga said:

Is anything violated by allowing this?

Not any applicable law that I am aware of. Make sure plan document "automatically" pulls in all controlled group members (i.e., a corporate resolution to adopt plan is not required). 

[Peter Gulia]

To evaluate a range of potential answers to the questions raised above, one might read carefully the Labor department’s rule.

 

29 C.F.R. § 2510.3-55

Definition of employer—Association Retirement Plans and other multiple employer pension benefit plans.

https://ecfr.federalregister.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-B/part-2510/section-2510.3-55

 

[FORMER ESQ.]

47 minutes ago, Peter Gulia said:

To evaluate a range of potential answers to the questions raised above, one might read carefully the Labor department’s rule.

 

29 C.F.R. § 2510.3-55

Definition of employer—Association Retirement Plans and other multiple employer pension benefit plans.

https://ecfr.federalregister.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-B/part-2510/section-2510.3-55

 

Peter, I appreciate this. As I recall, the DOL in previous sub-regulatory guidance has indicated that members of the controlled group share "sufficient commonality" in the circumstance described above. 

[Purplemandinga]

Peter, I've read section 2510.3-55 and my concern was that "Employer Member" ≠ "Employer". I think you and I may have been thinking the same thing.

Former, do you know where I might be able to find the guidance you speak of?

[FORMER ESQ.]

35 minutes ago, Purplemandinga said:

Former, do you know where I might be able to find the guidance you speak of?

Let me think about where I saw this, and I will direct respond to you.

[AbsolutelyOkayPossibly]

Actually, I see what Peter is saying and I don’t think he is necessarily agreeing with you purple. A careful reading may indeed yield several answers. I am curious about Former’s guidance though.  Interesting question.

[Peter Gulia]

I didn't express any view, or even mode of reasoning.  Rather, my post was about pointing to a rule.  It is not the only source of law on the questions raised.

[Purplemandinga]

Thanks everyone for taking the time to respond. I still haven't found the guidance that was suggested exists here. Could anyone clue me in to where I could search for something as specific as this? Sorry to be a pain.

[Peter Gulia]

The point Former Esq. describes might be in ERISA Advisory Opinion 89-06A:  “The Department of Labor . . . would consider a member of a controlled group which establishes a benefit plan for its employees and/or the employees of other members of the controlled group to be an employer within the meaning of section 3(5) of ERISA.”