MEP 403(b) Plan and SECURE

We have a 403(b) Plan that is a multiple employer plan (MEP).

Under SECURE 2.0, new 403(b) Plans (established after 12/29/2022) are required to include auto-enrollment/auto-escalation.  Would this apply to new employers who join the MEP?  The MEP itself is not a new plan, but would a new employer who joins the MEP be considered to have started a new plan by joining the MEP?  Are there any exceptions or ways out of this new requirement? 

While different employers in the MEP do have some flexibility regarding the MEP, its much easier if the MEP is mostly uniform across all participating employers (so having auto-enrollment/escalation for some and not others makes it more complex to administer).

While we're at it, is there any way around the Long-Term Part-Term rules?  I don't think so, but figured I'd ask while I'm here.

EDIT:  According to Notice 2024-02 (https://www.irs.gov/pub/irs-drop/n-24-02.pdf), it looks like an employer joining a MEP after 12/29/2022 is treated as starting a new plan.  There is a possible exemption if the employer joining the MEP already had a pre-12/29/2022 plan and is treated as merging into the MEP, the employer can treat the MEP as a continuation of the older plan, rather than a new plan.  I think this answers my question -- whether you agree or disagree I appreciate your comments!

“Subparagraph [414A(c)(2)](A) [excepting an arrangement established before December 29, 2022] shall not apply in the case of an employer adopting after [December 29, 2022] a plan maintained by more than one employer, and subsection [414A](a) shall apply with respect to such employer as if such plan were a single plan.” Internal Revenue Code of 1986 (26 U.S.C.) § 414A(c)(2)(B).

“In the case of a plan maintained by more than 1 employer, subparagraphs [414A(c)(4)](A) [excepting an employer in existence for less than three years] and [414A(c)(4)](B) [excepting an employer until after it “normally employed more than 10 employees”] shall be applied separately with respect to each such employer.” Internal Revenue Code of 1986 (26 U.S.C.) § 414A(c)(4)(C).

http://uscode.house.gov/view.xhtml?req=(title:26 section:414A edition:prelim) OR (granuleid:USC-prelim-title26-section414A)&f=treesort&edition=prelim&num=0&jumpTo=true

(There are IRS interpretations on those points.)

But a multiple-employer plan’s governing documents might provide that every participating employer adopts an eligible automatic contribution arrangement designed to meet § 414A(a), even if some employers’ participations need not meet that tax-qualification condition.

Whether that plan design is a helpful or harmful business strategy might be the multiple-employer plan’s sponsor’s business decision.
 

As to your auto-enrollment question the, one item not addressed in the notice is whether a pre-enactment single employer plan that adopts a post-enactment MEP is subject to auto-enrollment. It is likely that based on an interpretation of the statute, the plan would be subject to auto-enrollment. So, even though it may be a merger into the MEP, if it's a post-enactment MEP, then auto enrollment likely applies (unless the employer falls under the new business or small employer exceptions). 

Agree with you that there is no way around the LTPE rules, unless it's a non-ERISA 403(b) plan.