The U.S. Department of Labor unveiled its final rule on Monday to expand the creation and use of open multiple employer plans (MEPs) designed to encourage workplace retirement savings.

The new rule allows firms or associations to band together to offer employees a defined-contribution plan as long as participating organizations have geography or a similar industry in common.

Advisors are expected to leverage these retirement plans to reduce cost, administration and fiduciary liability for clients, and eventually may even use them as a branding opportunity.

"Many small businesses would like to offer retirement benefits to their employees, but are discouraged by the cost and complexity of running their own plans," Patrick Pizzella, acting secretary of labor, said in a news release.

"Association retirement plans offer valuable retirement security to small businesses' employees through their retirement years,” he added.

Some 66% of small business owners who do not offer a retirement plan are likely to consider an open MEP, according to a recent survey by Empower Retirement, a Denver-based firm that administers $635 billion in retirement plan assets for more than 9.2 million plan participants.

As important to advisors, 50% of business owners said they’d seek help from a financial professional when opening an open MEP, the survey found.

Small business owners’ interests in open MEPs are “piqued” over potentially lowering costs to their organizations and fees to employees in a workplace retirement plan offering, Empower President Edmund Murphy III said.

“Broadening terms to allow even more small businesses the opportunity to offer workplace retirement plans potentially puts more employees on a path to building their retirement savings,” he said.

At small businesses in the U.S. with fewer than 100 employees, less than half of workers have access to a defined contribution retirement plan, Murphy added. 

First « 1 2 » Next