PEPS? MEPS? GoPS? what are these?
PEPs
- Introduced with the SECURE act, PEPS allow unrelated employers that meet certain requirements to band together to participate in a single retirement plan, in order to take advantage of their collective bargaining power to obtain lower fees and better services. PEPs are limited to 401k plans, Defined benefit plans, governmental 457(b) plans, 403(b) plans and multi-employer plans are excluded from new PEP provisions.
MEPS
- MEPs allow related businesses (ie: construction companies) to band together in a similar manner to PEPs to participate in a single retirement plan. While MEPs previously existed, they are now much easier and more beneficial to establish. Previously one non compliant employer could disqualify the entire plan, but provisions have been enacted to ensure this does not happen. SECURE act also exempts smaller MEPs from expensive audits, as long as no single employer exceeds 100 employees total.
GoPs
- A GoP is another new type of plan created by the SECURE act, in which employers can file a single form 5500 for multiple defined contribution plans. The plans must have the same trustee, administrator, fiduciaries, investments and plan year in order to be considered. Unlike MEPs and PEPs, GoPs are not single plans, but rather a single form 5500 filing.
