Employers that join association retirement plans could, theoretically, try to discriminate against employees who look as if they’ll live a long time.
But, in practice, federal officials say, lifespan-based discrimination might not be a big issue for multiple-employer association plans.
(Related: What If Your Clients Live to 100?)
Officials at the Employee Benefits Security Administration (EBSA), an arm of the U.S. Department of Labor (DOL), raise, and dismiss, concerns about lifespan-based discrimination in their new final regulations for association retirement plans.
The Association Retirement Plan Regulation
Some policymakers hope that letting small employers team up to offer defined contribution retirement plans could cut the cost of providing retirement benefits, and increase workers’ access to retirement benefits.
Congress is debating bills that could encourage use of “multiple-employer plans,” or MEPs. EBSA and DOL are trying to get a head start on encouraging use of MEPs, by letting the small employers in a MEP act as if they were one big employer, for some purposes.
EBSA and DOL published a draft version of the MEP employer definition regulation in October.
(Related: DOL Releases Proposed Rule on MEPs)
Individuals and organizations submitted 57 comments on the draft. Most supported the general goal of supporting use of multiple-employer plans.
EBSA and DOL are preparing to publish the new, final regulation in the Federal Register Wednesday. The regulation is set to take effect 60 days after the publication date.
Association Retirement Plans v. Association Health Plans
The DOL has already started implementing a new final regulation that lets small employers team up to act as one employer when they’re buying health benefits, through an association health plan (AHP).
The AHP regulation includes many provisions that prohibit discrimination based on employees’ health status, or employees’ or employers’ claims.
EBSA officials say, in a footnote in the introduction of the new association retirement plan regulation, they decided against putting similar anti-discrimination provisions in the association retirement plan regulation.
“Defined contribution retirement plans do not underwrite health risk,” officials say.