The SCRS 401(k) Multiple Employer Plan (MEP)
The vision of SCRS MEP 401k plan was to help participating businesses and employees save expenses relevant to their 401k balances, reduce administrative responsibilities for companies and provide fiduciary support. With this vision in mind, the Board of SCRS conducted diligent research to see if this vision was possible. The Board concluded that as an association we could pull our resources together for leverage to save employees and businesses some of their hard earned money, while reducing the administrative burden and providing fiduciary support….we decided this was something we had to pursue.
After interviewing various providers to assist in the implementation and ongoing management of the plan we launched the SCRS MEP 401k plan in April 2019. Since then and even through COVID, we have seen the plan grow and interest explode. Some of the plan highlights include:
- Ability for each business to customize their own plan features
- Administrative support to help with transition, onboarding and employee education
- Executive Committee within SCRS that conducts quarterly review of plan and investments
- Pre-negotiated declining fee schedule, meaning as the plan grows costs automatically go down
- SCRS prepares the annual tax filing (5500)
- One audit for the entire plan, which saves companies who have to do their own audit thousands of dollars per year
SCRS MEP 401K Plan
Learn more about how the SCRS Multiple Employer Plan has helped businesses of different sizes:
Example 1: Employer with 125+ Employees
A collision repair business with 3 locations has 130 employees. Their previous 401(k) had $3 million and received annual contributions of $250,000 per year. Since an annual audit is required when eligible employees exceed 125, the employer was faced with a new annual bill of $10,000.
By moving his 401(k) plan to SCRS, the shop saves 20% in immediate savings and this reduction also includes the cost of the annual audit. The business can retain same design features from current plan, while saving $24,000 annually, and the company now benefits from professional oversight and fiduciary support from the SCRS Investment Committee.
Example 2: Employer with 25 Employees
A collision repair shop has one location and had 20 employees. Company recently established a 401(k) plan to meet their resident State requirements for offering access to a retirement plan. Participation has been modest and the plan has a balance of $100,000. Company pays $5,100 per year between administration, and compliance testing/tax return submission.
The owner of the company learned through his state affiliate that he is eligible to participate in the SCRS Retirement 401k Plan and combine with other employers to drive down administrative costs. Upon joining, administration expenses reduced by over 50% to $2,400 per year and the company now benefits from professional oversight and fiduciary support from the SCRS Investment Committee.
In The News:
- More businesses offering retirement plan to recruit, retain employees; Find out how SCRS can help
- 401(k) plan contribution limits increase in 2022
- New York to require most private employers to offer a retirement plan or enroll in theirs
- Record 401(k) lawsuits focus attention on employers’ fiduciary responsibility
Interested and want to learn more?
Our plan advisors offer a cost comparison analysis and all you need to do is provide them with three documents. In doing so they will prepare an analysis of your plan and review the findings. Even if you decide to stick with your current 401k, having this analysis as part of your 401k file is beneficial in case of a future audit. To conduct this analysis you would need to provide the following:
- List of current investment options and balance in each.
- Annual Fee Summary (called a 408(b)2) from the current provider.
- Any invoices the shop pays directly? Most common would be quarterly or annual record keeping fees or ‘Third Party Administration’.
You can reach out to: