DOL Finalizes Rule Expanding Access to Association Retirement Plans

On July 29, the U. S. Department of Labor (DOL) finalized a rule intended to make it easier for smaller businesses to band together and offer retirement plans to employees. Under the rule, ARPs could be offered by associations of employers in a city, county, state, or a multi-state metropolitan area, or in a particular industry nationwide. In addition to association sponsors, the plans could also be sponsored through Professional Employer Organizations (PEO). A PEO is a human-resource company that contractually assumes certain employment responsibilities for its client employers. The final rule effective date is September 30, 2019.

Additionally, and in direct response to input provided by AGC, the U.S. Department of Treasury and Internal Revenue Service (IRS) proposed a rule that would provide relief from certain liabilities of participating in an MEP; specifically the joint liability for the qualification failures of every other employer in the MEP (known as the “one bad apple rule”) if certain conditions are satisfied. These IRS regulations won’t take effect until finalized and cannot be relied on in the meantime.

For more information, contact Jim Young at youngj@agc.org or 202-547-0133 or Claiborne Guy at claiborne.guy@agc.org or 703-837-5382.