New Prudential report addresses country’s retirement savings coverage gap, recommends model plan for small employers
Multiple employer plans (MEPs)—single plans providing benefits to the employees of two or more employers—have been utilized successfully for years by trade associations and professional employee organizations. Unfortunately, current laws discourage or prevent most small employers from taking advantage of them.
“Ignoring the current retirement coverage gap is a disservice to millions of hardworking Americans who need help preparing for retirement,” said
“We are encouraged by the bipartisan support in both houses of the
Prudential’s paper outlines features that a model multiple employer plan – or MEP – might incorporate, including:
- Automatic enrollment of employees and automatic escalation of employee contributions.
- Automatic deferral of employee contributions into an investment option designed to preserve principal. After four years, contributions would be made to a qualified default investment alternative, such as a target-date fund.
- A lifetime income solution among the plan’s investment and/or distribution options.
- Streamlined administration through standardized plan design.
- Clear delineation of fiduciary and administrative responsibilities, ensuring that each plan is managed in the best interests of its participants and beneficiaries, with those responsibilities assumed by benefit and investment professionals rather than participating employers.
Prudential Retirement delivers retirement plan solutions for public, private, and nonprofit organizations. Services include defined contribution, defined benefit and non-qualified deferred compensation record keeping, administrative services, investment management, comprehensive employee education and communications, and trustee services, as well as a variety of products and strategies, including institutional investment and income products, pension risk transfer solutions and structured settlement services. With over 85 years of retirement experience, Prudential Retirement helps meet the needs of 4.0 million participants and annuitants. Prudential Retirement has
Source: Prudential Retirement