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Most business owners in the cannabis industry understand the importance of having a solid retirement plan in place for their employees. They see it as an essential asset that can make them stand out to prospective staff members. Because it offers security and peace of mind, retirement benefits are a key feature that can attract the most skilled workers and keep them under the wing of your company.
With dependable retirement planning and marijuana HR consulting services, these processes can be greatly facilitated and your workflow can be streamlined. Before you decide on the plan that works best for you, delve deeper into the ins and outs of MEP 401k, think about how you’ll find a reputable 401k provider, and consider the differences between an open and closed plan. By reading on, you’ll also find out all about PEP, a relatively new kind of retirement plan, and see how it differs from MEP.
PEP stands for Pooled Employer Plan. It’s a retirement savings plan that includes at least two employers that aren’t connected apart by their membership in the plan. They don’t have to meet any regulatory requirements to come together for the sake of plan participation. It’s a single plan that’s adopted by all members, unlike it was the case with open MEP plans. There’s one 5500 for the whole plan. The members are fiduciaries when it comes to selecting and overseeing the PEP, and they’re considered to be plan sponsors of their part of the PEP.
The plan’s sponsor is the PPP, short for Pooled Plan Provider. The sponsor is typically a company that provides financial services. They have administrative responsibilities for handling the plan and can be audited by the Department of Labor and the Internal Revenue Service. They handle legal compliance for every member employer, which means they monitor, collect, and report on all data using software automation.
An open MEP is something of a precursor of the PEP plan, which was established under the SECURE Act in 2020. Open MEPs can also include unrelated employers from different industries, but they are required to have their own separate plans, each acquire their own bond, file their own 5500, and audit separately. Basically, their main commonality is the fact they’re working with the same provider. Compared to MEPs, PEP plans do away with DOL’s previous regulatory concerns and offer greater leeway when it comes to audit demands.
Apart from these two options, you can also opt for closed MEPs. You can reach the best decision about participation in a retirement savings plan by considering different options and checking how they fit your specific needs.
Here at Green Life Business Solutions, cannabis operators can receive full-scale support for all of their banking and payroll needs. Our recently launched multi-employer 401k administration services takes the guesswork and stress out of this important facet of your business. We’ll implement and monitor it, handle the enrollment process, and take care of other related tasks. You’ll have the freedom to focus on your business without worrying about these administrative hurdles.
Provide your employees with the tax-advantaged plan that will give them an employer-supported pension account and a steady stream of pre-tax contributions from their salaries. If you partner with us, you’ll receive a multitude of advantages, such as enhanced employee enrollment, effortless legal compliance, more flexibility, and more. Get in touch with us today to unlock all of the possibilities of our streamlined system.