Los Angeles partner Bruce Ashton was quoted in Benefits Pro on the subject of multiple employer plans (MEPs), an area of ERISA guidance that remains confusing to advisors and plan sponsors in light of the conflict between Department of Labor and IRS rules. In light of this, a recent report from the Government Accountability Office (GAO) has suggested a bit of teamwork between the IRS and the Department of Labor on the issue.

MEPs serve to share the burden of pension and retirement planning between more than one employer and have become a popular option for small companies looking to provide benefits to their employees. The GAO is pushing for more coordinated regulation, noting that the jurisdiction for MEPs is a somewhat messy business, despite the growth in their popularity.

Speaking at the American Society of Pension Professionals & Actuaries (ASPPA) Annual Conference in October, Bruce agreed that open MEPs can be tricky to administer, given the varying opinions from both governing bodies.

Bruce said there are useful options provided by MEPs that make them a valuable tool, but the DOL continues to stress that, except in the case of plans established by bona fide business associations, they form an aggregation of individual plans. In this regard, Bruce said the DOL looks for commonality and control - responsibility for the plan must be exercised either directly or indirectly by the participating employer. A recent DOL advisory opinion has dictated that no two unrelated employers can co-sponsor a single ERISA plan unless those commonality and control factors are included.

"Philosophically, I wonder why the DOL has taken this position, as the benefits outweigh the concerns," he said.

"I guess it could be they are worried about abuses by the service provider, or a concern that the employers who take part are not sufficiently engaged. I always counter that employers are in the business of running their business, not their retirement plans."