Association Retirement Plans

By Brian Thompson, CPFA

In the Retirement Plan industry, there has been a lot of buzz lately about organizations being able to pool together to share in one retirement plan, like a 401(k), for example. Most of that news is coming about because of the passage of the SECURE Act that was signed into law in December 2019. The SECURE Act will allow for unrelated businesses to band together in a single retirement plan, starting in 2021. Nonprofit organizations, as well as for-profit, will have some great opportunity and flexibility to join a pooled/multiple employer plan in 2021, if they don’t want to sponsor their own plan. But what is not commonly known sometimes is that associations are allowed to do that right now, and their member businesses are allowed to participate in the plan. An association and lot of small businesses that could be members may not want to take on the cost, administration burdens, and fiduciary liability of having their own plan, but being able to connect to a pooled/multiple employer plan can be a much more attractive possibility.

There are some unique benefits for associations including:

Of course, like anything regulated by the IRS and Department of Labor, there are some requirements and bureaucracy to navigate. But the potential benefits can be worth it. Please feel free to let us know if you have any questions or would like to learn more.

Brian Thompson, CPFA | Wealth Advisors of Iowa

Advisory services offered through Wealth Advisors of Iowa, LLC, a Registered Investment Adviser firm.