"Open" multiple employer plans after Advisory Opinion 2012-04A: an assessment

In Advisory Opinion 2012-04A, the Department of Labor (DOL) for the first time issued an explicit ruling that an "open" multiple employer plan (an Open MEP) is not a single employee benefit pension plan under the Employee Retirement Income Security Act of 1974 (ERISA), but a group of single employer plans. The DOL previously issued a significant number of Advisory Opinions addressing single ERISA plan status for multiple employer pension plans sponsored by employer associations and multiple employer welfare arrangements, and a number of commentators had taken the position that the standards set forth in these prior rulings indicated that Open MEPs were not multiple employer plans. In this article, the authors assess the legal underpinnings of the Opinion and the impact it will have on Open MEP providers and the small employers that participate in them. The analysis takes into account both the legal issues and the policy considerations that it appears are being applied to Open MEPs.