CBAI 401(k) MEP

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CBAI 401(k) Multiple Employer Plan

MSTC has partnered with Community Bankers Association of Illinois (CBAI) and Pentegra Services Inc. to create the CBAI 401(k) Multiple Employer Plan (MEP), a unique program available only to CBAI member banks that provides a highly competitive retirement plan with reduced fiduciary responsibility and liability for CBAI member banks.

The CBAI MEP simplifies a bank’s 401(k) program by outsourcing most fiduciary responsibilities and liabilities, eliminating the 5500 filings, and eliminating the plan audit (for larger plans), while providing potential cost savings. Participating CBAI members will have a dedicated team of experts from MSTC and Pentegra to manage the Plan. Each bank in the program retains the ability to customize plan provisions for its employees and the freedom to select its own financial advisor.

Most importantly, the MEP is controlled by an oversight committee comprised of representatives from participating banks. The participating banks will have direct input into the Plan structure, funds selection, fees, etc.

“We believe the CBAI 401(k) MEP has the potential to save CBAI member banks money, reduce their administrative burdens, expand the scope of services and number of funds available to participants, and help banks avoid much of their fiduciary liability,” said Mike Estes, president of Fisher National Bank and chairman of the CBAI 401(k) MEP Oversight Committee. “That is why my bank agreed to be among the first banks to join the MEP, and I volunteered to join the Oversight Committee.”

*These testimonials may not be representative of the experience of other customers, are no guarantee of future performances or success, and are unpaid. MSTC is not affiliated with any of the above mentioned financial institutions.
Retirement

Additional Details

A Multiple Employer Plan (MEP) is a retirement plan for businesses that typically have a common interest and are referred to as “Adopting Employers” when they elect to join the MEP. For the CBAI 401(k) MEP, the common interest among bankers is the CBAI membership.

There are many benefits your business will derive from adopting a retirement plan through the CBAI 401(k) MEP, including:

  • Potential cost savings from institutional investments, economies of scale, and possible reduction of plan audit costs for larger employers.
  • Reduced fiduciary risk by outsourcing the investment selection 3(38)* and administration 3(16)** of the plan.
  • Elimination of individual employer plan 5500 filings.
  • Ability to customize your plan provisions.
  • Team of experts managing your plan.

A major consideration that is critical for your bank is the amount of administration hours that a retirement plan requires, and the administrative relief that may occur as a result of participating in the CBAI 401(k) MEP.

Underestimating the administration required to properly operate a 401(k) plan is a common mistake. By participating in the MEP, Adopting Employers will be able to outsource a significant number of tasks including, but not limited to:

  • Select, monitor, and update investment menu, including notice to participants.
  • Comply with ERISA Section 404(c), including notices to participants, prospectus delivery, and copies of all changes.
  • Distribute required information to employees, including enrollment kits, SPD, 404(c) info, QDIA, 404a(5) fee information.
  • Annual nondiscrimination testing.
  • Employee eligibility tracking.
  • Contribution limit tracking.
  • Distribution requests for terminated Employees.
  • Distribution of participant statements.
  • Loan processing.
  • Compliance and legislative supervision.
  • Form 5500 filing.
  • And others.
  • Dedicated plan support team
  • Professional, top quality participant website, toll-free call center, quarterly statements, and enrollment information
  • Investment education and enrollment presentations by a local advisor, if elected
  • Professional team of retirement plan experts (including ERISA attorneys, investment fiduciaries, and retirement plan experts) to assist with plan design, compliance questions, etc.

Adopting Employers must still handle payroll, provide timely and accurate data, notify the plan administrator of employee changes, and make timely contributions.

However, under the CBAI 401(k) MEP, all of the principal fiduciary roles — named fiduciary, trustee, administrator, and investment manager — have been delegated to professionals, so many of your responsibilities and liabilities associated with these roles are outsourced.