For the past two years, with the advisement of the HR Working Group, AICUP has been working with industry leading consultants to develop a new 403(b) Multiple Employer Plan (MEP). These consultants are: Millennium Advisory Services, Pentegra, PlanPilot, PRM Consulting Group and TIAA. This program helps members collaboratively administer their retirement plans in order to better comply with IRS regulations and gain cost efficiencies under the MEP. This solution is gaining traction with private colleges in other states where Virginia, Wisconsin, Indiana and Michigan, have all implemented MEPs for private colleges in their states. Under the MEP, colleges have reduced financial liability exposure, reduced administrative burdens, and enhanced employee education.
- AICUP Member Participants: 4
After interacting and reviewing data, the following has been discovered:
- The average administrative fee reduction is over 29% (based on assumption of $125 million and growing with the addition of each new college).
- The average college has $31 million in retirement assets.
- The average number of active employees is 229.
- The average current administrative recordkeeping fee is about 26 basis points.
- In addition to the administrative savings, the estimated MEP savings on the investment lineup is projected to be about 20%.
- Employee education would be provided by an independent firm that has been successful in increasing on campus individual meetings and assisting employees to move assets to the less expensive MEP investment
- 11 Guiding Principles have been created as the vision for the MEP.
Member schools with these existing metrics can expect to experience similar results.
Michael Rhim, Michael.email@example.com or 202-745-3721