Pentegra
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Retirement Plan Documents Specialist Loren D. Stark Company
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Farmer & Betts, Inc.
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Administrator/Consultant (DC and DB) TPA Professionals
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Plumbers Local Union No. 1 Benefit Funds
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Kentucky Trust Company
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Retirement, LLC
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Bates & Company
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Retirement Plan Administrator (TPA) Retirement Plan Consultants
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RTD Financial Advisors
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Retirement Plan Legal Specialist Pentegra
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EPIC: TPA/DPS
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Retirement, LLC
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Nicholas Pension Consultants
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EPIC Retirement Plan Services
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Trucker Huss, A Professional Corporation
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Jr Retirement Plan Administrator/ Administrative Assistant Hochheiser Deutsch & Co, Inc.
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Carpenter Morse Group
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Employee Benefits & Executive Compensation Associate Attorney Polsinelli PC
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Question 317: Other than an employee organization group, a Professional Employer Organization, or a trade association, what would constitute enough "commonality" to be allowable as a single Multiple Employer Plan? How about a single common owner across all of the employers (what if they only hold 1%, 5%, or some other percentage)? What do you think constitutes organizational commonality/control for single MEP purposes -- a common board of directors? |
Answer: Remember that the presence of a prior organizational nexus between plan sponsors is just one of the factors the DOL looks at, but it certainly appears to be a major player. Control of the plan is also a crucial issue. And in any case, we are dealing with a facts and circumstances test. So I cannot answer questions similar to "Is 5% enough?" Just so we are clear, here are the standards the DOL uses (taken from the text of Advisory Opinion 2012-04A (the "Opinion"): [R]elevant factors in determining whether a purported plan sponsor is a bona fide group or association of employers include the following: how members are solicited; who is entitled to participate and who actually participates in the association; the process by which the association was formed, the purposes for which it was formed, and what, if any, were the preexisting relationships of its members; the powers, rights, and privileges of employer members that exist by reason of their status as employers; and who actually controls and directs the activities and operations of the benefit program. The employers that participate in a benefit program must, either directly or indirectly, exercise control over the program, both in form and in substance, in order to act as a bona fide employer group or association with respect to the program.The Opinion told us that open MEPs are not single ERISA plans. For a discussion of this issue, see Q&A 316.). However, that's not all it did. It also discussed other arrangements and their ERISA status. Let's review them together:
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Answers are provided as general guidance on the subjects covered in the question and are not provided as legal advice to the questioner or to readers. Any legal issues should be reviewed by your legal counsel to apply the law to the particular facts of this and similar situations.
The law in this area changes frequently. Answers are believed to be correct as of the posting dates shown. The completeness or accuracy of a particular answer may be affected by changes in the law (statutes, regulations, rulings, court decisions, etc.) that occur after the date on which a particular Q&A is posted.
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