Benefits of a Multiple Employer Plan
There are two different kinds of 401(k) plans: Single Employer plans and Multiple Employer plans. The plan you are considering is a Multiple Employer Plan (MEP), which has some distinct advantages over a single plan.
Your plan will be a part of a larger plan trust, under your payroll company’s 401(k) plan.
This benefits your company in a number of ways.
First, your plan will be covered under the payroll company 401(k) plan audit.
This is especially valuable if you have more than 100 eligible employees. The audit generally costs about $5,000, which means that you save that money by being a part of the larger plan.
Second, you hand off the fiduciary liability to the plan sponsor
Your payroll company and Slavic401k work together to bear the fiduciary responsibility for your company, helping your plan stay compliant with respect to the Internal Revenue Service and Department of Labor.
Third, you take advantage of economy of scale.
Because there could be hundreds of businesses like yours participating in the master plan, the pooling of resources allows the average investor to have access to top shelf mutual funds at some of the lowest expense. Institutional shares, Admiral class shares, and other funds are some of the highest quality funds that you can invest in, but couldn’t before.
Finally, you hand off the entire administration of the plan to somebody else.
Rather than working with a broker, an advisor, and a TPA, you and your payroll company work with Slavic401k, which is fully bundled, and handles all of these roles, allowing your payroll company to process the 401(k) contributions as they process your payroll.