|About EANJ 401k Advantage
EANJ 401k Advantage is a multiple employer plan (the “Plan”) adopted by two or more employers who are unrelated for income tax purposes but who are members of Employers Association of New Jersey (EANJ), a nonprofit trade association formed in 1916 dedicated to responsible employee relations. EANJ is the MEP Administrator and its members are eligible to participate in the MEP by adopting the Plan.
EANJ 401k Advantage is subject to the Employee Retirement Security Income Act of 1974 (ERISA). ERISA is a federal law that sets minimum standards for retirement savings plans and provides protection for individuals enrolled in these plans.
EANJ has appointed three trustees. They are uncompensated.
The Trustees have approved an Investment Policy and have retained BCG Securities, Inc. as Investment Advisors under ERISA section 3(38) and have established fees.
The Trustees have appointed Benefit Consultant Group, Inc. to provide administrative services under ERISA section 3(16) and have established fees.
The Custodian of the Plan is Mid-Atlantic Trust Company.
The Plan’s legal counsel is the Rosenbaum Law Firm P.C.
Some of the benefits to a Participating Employer may include elimination of most plan sponsor functions, such as an annual plan audit and Form 5500 filing, and some plan fiduciary functions, such as choosing which investment options will be available to plan participants. Generally, MEP adopting employers no longer file a Form 5500 or maintain a fidelity bond. These functions are generally handled by the MEP plan administrator, not the adopting employer.
Other benefits include offering and pricing that an employer may not be able to obtain on its own, in addition to investment advisory services and monitoring.
There may be risks to joining a MEP. For example, if one participating employer violates the qualified retirement plan rules, such as the top heavy or vesting rules, the entire plan and all the adopting employers can face plan disqualification or nondeductible monetary sanctions on the employers.
Participating Employers may be required to pay their proportionate share of any expenses of the Plan, including, but not limited to audit expenses.
Other requirements of Plan Participants may be contained in the Plan Document.
Participating Employer Responsibilities
An adopting employer remains responsible for some ERISA requirements that cannot delegated to the MEP, such as the decision to adopt or terminate participation in the MEP; the responsibility for monitoring the MEP sponsor and perhaps the plan investments unless those are handled by a separate named fiduciary. The employer may also be responsible for the prudent selection and monitoring the performance of that fiduciary.
Other responsibilities include:
The need to make timely and accurate plan contributions:
Plan design decisions, such as the level of match.
Distribution to participants of required notices and information unless handled by the MEP plan administrator; and
Communication and enrollment assistance for participants unless handled by the MEP plan sponsor.
What are some questions that an employer should ask when selecting a Multiple Employer Plan?
Will existing plan features be changed?
Do the employers meet the DOL's commonality requirement? See DOL Adv. Op. 2001-4.
How much will the annual audit expense be? CPAs advise that a major cost of the plan audit arises from testing the compensation, deferrals, and other census derived compliance components of the plan’s administration. Where each employer participating in the MEP does its own payroll (or does it through its payroll service), there is no commonality of payroll, so it is doubtful that there are substantial economies to an audit for such a MEP.
Who is handling the administration work, fiduciary oversight, and plan operations?
What are the credentials and MEP expertise of the various parties involved with the MEP? The adopting employer has the duty to prudently select and monitor.
How long have the parties to the MEP been involved with MEPs?
Is there an ERISA attorney advising the MEP and maintaining the plan document? If so, what is their background specific to MEPs?
How are all of the parties paid? Are there potential conflicts of interest or prohibited transactions?
f you wish to retain your current adviser within an MEP arrangement, will the Administrator accept the adopter’s adviser?
Is there a proper separation of the roles and ownership structure of the MEP‟s plan administrator, independent fiduciary and contracted service providers?
What measures does the MEP take to terminate noncompliant adopting employers that could negatively affect the entire MEP? Does the Plan Document allow them to unilaterally terminate adopters with compliance problems?
The information provided on this document and any accompanying website(s) is for general informational purposes only. It does not constitute legal advice nor does it represent a solicitation to enroll in the MEP. Care should be taken to consult with a competent professional when considering whether to become a participating employer.