If increased membership recruitment and retention are on your organization’s holiday wish list, well...the holidays may have come early.
Have you ever heard of a 401(k) MEP? (The “MEP” stands for Multiple Employer Plan.)
Basically, it’s a retirement savings package in which multiple businesses with a “common nexus” participate in a single retirement plan. (That means businesses with some kind of commonality; businesses within the same industry or geographic region, for example.)
You mean, like being a member of a trade association or chamber of commerce?
Yup! Trade associations and chambers of commerce could participate in and offer a 401(k) MEP.
...but not yet. See, right now there’s a “one bad apple” rule, which states that if one company fails to meet its obligation, all companies within the 401(k) MEP will be liable, rather than just the offending company, and the entire MEP could be subject to disqualification. (That’s a big risk!)
The IRS understands that, and that's why it has proposed an amendment to the MEP, which would eliminate the “one bad apple” rule and protect the participating companies as long as other specified requirements are met.
But think about it: If your trade association or chamber of commerce could offer a 401(k) MEP, that’s a HUGE incentive for members to join. By combining resources in a 401(k) MEP, it lowers the cost of the plan, meaning lower prices for your members (if they’re businesses/business owners) AND lower prices for their employees.
Plus, once your members are bought into and offering the 401(k) MEP to their employees, it gives them more of an incentive to stay with your trade association or chamber of commerce, especially if they are unable to get access to a 401(k) MEP on their own. (Hello increased retention!)
Right now, the proposed amendment is still pending, but keep an eye (and ear) out for updates. This could be a BIG deal for your trade association or chamber of commerce!
In the meantime, if you’d like some other ways to recruit and retain members, check out our Ultimate Guide to Membership Management. In it, you’ll find tips and best practices for member acquisition, member engagement, non-dues revenue, renewals and retention, and more!