Text of DOL Proposed Regs: Definition of 'Employer' Under ERISA

100 pages. "[T]he proposed regulation clarifies that employer groups or associations and PEOs can, when satisfying certain criteria, constitute 'employers' within the meaning of section 3(5) of ERISA for purposes of establishing or maintaining an individual account 'employee pension benefit plan' within the meaning of ERISA section 3(2). As an 'employer,' a group or association can sponsor a defined contribution retirement plan for its members, as can a PEO sponsor a plan for client employers (collectively referred to as 'MEPs' unless otherwise specified).

"The proposed regulation would allow different businesses to join a MEP, either through a group or association or through a PEO. The proposal would also permit certain working owners without employees to participate in a MEP sponsored by a group or association.... The proposal would not affect whether groups, associations, or PEOs assume joint-employment relationships with member-employers or client employers. But the proposal may affect banks, insurance companies, securities broker-dealers, record keepers, and other commercial enterprises that provide retirement-plan products and services....

"Under the proposal here, an employer generally would be required to execute a participation agreement or similar instrument that lays out the rights and obligations of the MEP sponsor and the participating employer before participating. But these employers would not be viewed as sponsoring their own separate, individual plans under ERISA. Rather, the MEP, if meeting the conditions of [these proposed regs], would constitute a single employee benefit plan for purposes of Title I of ERISA. Consequently, the MEP sponsor -- and not the participating employers -- would generally be responsible, as plan administrator, for compliance with the requirements of Title I of ERISA, including reporting, disclosure, and fiduciary obligations." Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL]