Tax Facts

3768 / If employers use a PEO to provide the MEP option, do the participating employees have any fiduciary responsibilities with respect to the plan?

According to the preamble to the final regulations, participating employers retain some degree of fiduciary responsibility even if they use a PEO to administer the MEP. Although the guidance is not extensive, the preamble provides that the employer would be responsible for acting prudently in monitoring and selecting the relevant service provider. The employer would also be responsible for ensuring that employee contributions to the MEP are transferred in a timely manner.

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