How MEP Works

Different than a traditional 401(k) plan.

The Multiple Employer Plan (MEP) is very different from a traditional 401(k) plan. With a MEP, the fiduciary responsibility and the administration have been transferred to a third party, in this case The Payroll Company. The Payroll Company is the plan administrator and TPC Qualified Plans LLC is the Plan Sponsor, so that entity takes the fiduciary responsibility.

Why do companies join a MEP? Besides shifting fiduciary responsibility to the plan sponsor, employers choose a MEP because it ultimately saves company resources. Generally companies only need to handle basic administrative tasks and with us, because it is integrated with payroll, The Payroll Company handles those administrative tasks.

Does that mean there's no oversight? Of course not. We operate in accordance with ERISA's prudent expert rules. However, you don't have to worry about allocating resources for oversight. As the plan sponsor, it's up to us to conduct any monitoring or appoint fiduciaries, if needed.

Is a MEP more expensive? Overall, you'll find a MEP will be more cost-effective than traditional 401(k) plans. For one thing, you don't have to handle the administrative costs associated with managing your own plans. Secondly, we choose from investment funds that generally have lower fees. And lastly, MEPs allow you to take advantage of the economy of scale for lower pricing than with an individual plan.

Who are the multiple employers? A MEP is really a single employer plan that is utilized by multiple employers. There is only a single sponsor of the plan, one plan document, and one custodian. And better yet, no one employer can affect the other employers in the plan.