Definition of Employer Under Section 3(5) of ERISA-Association Retirement Plans and Other Multiple-Employer Plans

July 31, 2019

FR Document: 2019-16074
Citation: 84 FR 37508

 PDF Pages 37508-37544 (37 pages)

Abstract: This document contains a final regulation under title I of the Employee Retirement Income Security Act (ERISA) that expands access to affordable quality retirement saving options by clarifying the circumstances under which an employer group or association or a professional employer organization (PEO) may sponsor a multiple employer workplace retirement plan under title I of ERISA (as opposed to providing an arrangement that constitutes multiple separate retirement plans).


The final regulation does this by clarifying that employer groups or associations and PEOs can, when satisfying certain criteria, constitute “employers” within the meaning of ERISA for purposes of establishing or maintaining an individual account “employee pension benefit plan” within the meaning of ERISA. As an “employer,” a group or association, as well as a PEO, can sponsor a defined contribution retirement plan for its members (collectively referred to as “multiple employer plans” or “MEPs” unless otherwise specified). Thus, different businesses may join a MEP, either through a group or association or through a PEO. The final regulation also permits certain working owners without employees to participate in a MEP sponsored by an employer group or association. The final rule primarily affects groups or associations of employers, PEOs, plan participants, and plan beneficiaries. It does not affect whether groups, associations, or PEOs assume joint-employment relationships with member-employers or client employers. But it may affect banks, insurance companies, securities broker-dealers, record keepers, and other commercial enterprises that provide retirement-plan products and services to ERISA plans and plan sponsors.


This final regulation is effective on September 30, 2019.


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