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Association Retirement Plans


In the Retirement Plan industry, there has been a lot of buzz lately about organizations being able to pool together to share in one retirement plan, like a 401(k), for example. Most of that news is coming about because of the passage of the SECURE Act that was signed into law in December 2019. The SECURE Act will allow for unrelated businesses to band together in a single retirement plan, starting in 2021. Nonprofit organizations, as well as for-profit, will have some great opportunity and flexibility to join a pooled/multiple employer plan in 2021, if they don’t want to sponsor their own plan. But what is not commonly known sometimes is that associations are allowed to do that right now, and their member businesses are allowed to participate in the plan. An association and lot of small businesses that could be members may not want to take on the cost, administration burdens, and fiduciary liability of having their own plan, but being able to connect to a pooled/multiple employer plan can be a much more attractive possibility.

There are some unique benefits for associations including: 

  • An association having a retirement plan for itself and its member businesses helps raise its profile and adds good value to its member businesses. There are a lot of benefits that can be derived from this.
    • One of the most important is helping the association attract and retain members, which can translate to meet revenue goals, resourcefulness, and influence because of the size of the association.
    • Also, an association provides value to their member businesses by decreasing the administrative burden and defraying a lot of the fiduciary liability of those businesses having their own plan.
    • Additionally, there can be plan cost savings because of the larger amount of pooled assets in the plan that can yield better pricing from service providers.
  • There are also the general benefits any company/organization can benefit from by having a retirement plan.
    • The biggest benefit is to be able to offer a quality retirement benefit in the battle for human capital. This is especially important for leaders in an organization, whether it’s for the association itself or any of the member businesses.
    • Plus, access to a retirement plan gives all of us the ability to save easily through our paycheck.
    • Lastly, the benefit from compounding of investment returns in a tax qualified account.

Of course, like anything regulated by the IRS and Department of Labor, there are some requirements and bureaucracy to navigate. But the potential benefits can be worth it. Please feel free to let us know if you have any questions or would like to learn more.






Brian Thompson, CPFA | Retirement Plan Advisor & Wealth Manager