There was a lot of chatter this week on the news wires about the Open MEP. It seems that [finally!] this model is getting the attention it deserves— and with President Obama now urging Congress to push legislation supporting it to the private sector, we may see the Open MEP return. We’ve obviously got a lot to say on this model (TAG originated the concept and trademarked the term), and we couldn’t be happier that what we built grew to become such a conversational topic.
Most of you reading this are already working with TAG and know the history around what we created with the Open MEP. MEPs, by their very premise, offer a leveraged solution to the very groups (small business) that need it most. Today, one in three Americans does not have access to a retirement solution through their employer. We all know that the cost, the administrative burden, and the risk are key drivers in whether or not a small business will offer such a plan. When we as an industry talk about ‘coverage solutions’, there is a reason that MEPs always make the conversation: it is because a (properly functioning) MEP is superior to than anything out there.
If we do end up switching the power back on for the Open MEP, you can expect big things. TAG now offers a robust front-end payroll aggregation system that is unparalleled in the industry. After our Opinion Letter from the DOL (AO 2014-04A), TAG switched everyone to single employer plans and set about redefining the way payroll and participant data feeds are collected. This was based on necessity as the DOL required far more intensive reporting while still utilizing the efficiency and effectiveness in the collaborative shared-service model. It took some radical thinking and some key technological builds, but TAG figured out how to run every plan—single or multiple employer—with the same scale and efficiency as our original Open MEP. So think about the best single employer plan possible, but now with the added benefit of being tied to a bigger scale and greater protection.
The idea of shifting liability to specific, and named, fiduciaries in a MEP carries a lot of value…in fact this is one the key reasons advisors use a model like ours for their clients. Our industry is undergoing yet another seismic change—one of greater audit oversight by the DOL and IRS. Many of you have clients with us that have experienced DOL audits first hand. The good news (as you’ve seen with us) is that DOL audits don’t have to be painful at all. It all comes back to that front-end data engine TAG built—we independently track all payroll and participant data. Most of the trauma that comes from an audit starts with a lack of data, then progresses to paths unknown because of such a lack of preparation; doesn’t it make sense to eliminate such a problem in the first place?
In regards to the Open MEP, there is a reason to be excited, as this is a great model for your clients. It is an easy door opener and an even easier solution if run with expertise. If it does come back, TAG’s Open MEP will be better than ever thanks to the procedures and protection we have built through the years.