Instead of every member sponsoring individual plans with a full set of plan documents and the fiduciary liability that comes with an individual plan, you can let your association sponsor a plan for you and your fellow members.
As we all know, more can sometimes mean less. Like wholesale products, where each unit costs less than retail because you're selling more of them, 401K plans with larger assets and/or numbers of participants can benefit from economies of scale reducing plan costs.
Instead of every member sponsoring individual plans and acting as Plan Sponsor, Plan Administrator and most times Investment Manager, you could simply participate in the Association Member Retirement Plan as a participating member and relieve yourself of those fiduciary roles.
Though you are simply a participating member in your association sponsored plan, you would still have the flexibility to set your own eligibility requirements, employer match, employer profit sharing, vesting, etc.
The Association Member Retirement Plan would take advantage of a full service record keeper who would either communicate directly with your payroll company (depending on who your payroll company is) or by simply reviewing each and every pay file for employee contribution and employer match accuracy.
The Association Member Retirement Plan would take advantage of a full service record keeper ensuring your employees receive all required notifications and disclosures without needing your involvement. In addition, they would work directly with your employees on any plan issue relieving your HR staff of that burden.
One plan, one IRS Form 5500 filed by your association covering all members.
One plan, one audit. Audit is spread across all participating members not just focused on your employees.
One plan, one audit. Audit cost is shared across all participating members.
One plan, one set of documents established and maintained by the Plan Administrator.
One plan, one initial vendor selection and on going monitoring of their services performed by your Plan Administrator.
One plan, one menu of investments. All participating members utilize the same menu of investments vetted and maintained by the investment fiduciary.
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