Understanding the Roles in a 401(k) Multiple Employer Plan

401(k) multiple employer plan

Retirement planning is a crucial aspect of financial management, and 401(k) plans have long been a popular option for individuals and businesses alike. In recent years, 401(k) multiple employer plans (MEPs) have gained traction as a way for small to medium-sized businesses to offer retirement benefits to their employees more efficiently. Understanding the roles within a 401(k) multiple employer plan is essential for both employers and employees to maximize the benefits of this arrangement.

Employer Sponsor

At the core of a 401(k) multiple employer plan is the employer sponsor. This entity takes on the responsibility of establishing and maintaining the retirement plan for its employees. In a MEP, multiple employers join together under a single plan, pooling their resources and leveraging economies of scale to reduce administrative costs and regulatory burdens.

The employer sponsor serves as the primary point of contact for plan administration and communication with the plan’s service providers. They have the authority to make decisions regarding plan design, investment options, and employee eligibility criteria. Additionally, the employer sponsor is responsible for ensuring compliance with relevant regulations, such as those outlined in the Employee Retirement Income Security Act (ERISA).

Plan Administrator

The plan administrator plays a crucial role in overseeing the day-to-day operations of the 401(k) MEP. This individual or entity is responsible for tasks such as enrolling employees in the plan, processing contributions, and coordinating with the plan’s investment manager.

In many cases, the employer sponsor acts as the plan administrator. However, they may choose to delegate these responsibilities to a third-party administrator (TPA) or another service provider. Regardless of who fills this role, the plan administrator must ensure that the plan complies with all applicable laws and regulations and that the interests of plan participants are protected.

View the most common administration responsibilities in a Slavic401k MEP

Investment Manager

One of the key benefits of a 401(k) MEP is the ability to offer a diverse range of investment options to participants. The investment manager is responsible for selecting and managing these options, with the goal of maximizing returns while managing risk.

The investment manager may be an individual, such as a financial advisor or portfolio manager, or a team within a financial institution. They have the expertise to conduct research, perform due diligence on investment options, and construct well-balanced portfolios that align with the goals and risk tolerance of plan participants.


The recordkeeper plays a vital role in maintaining accurate records of the 401(k) MEP’s activities and transactions. This includes tracking individual account balances, processing contributions and distributions, and generating participant statements and reports.

A reliable recordkeeper utilizes technology and secure systems to ensure the integrity and confidentiality of the plan’s data. They also provide essential support to both employers and employees by offering online account access, educational resources, and responsive customer service.


Last but certainly not least, fiduciaries play a critical role in overseeing the 401(k) MEP and acting in the best interests of plan participants. Fiduciaries have a legal obligation to prudently manage the plan’s assets, diversify investments, and avoid conflicts of interest.

Employer sponsors, plan administrators, investment managers, and recordkeepers may all serve as fiduciaries to varying degrees, depending on their level of involvement and authority within the plan. It’s essential for fiduciaries to understand their duties and obligations under ERISA and to act with diligence and care to protect the retirement savings of plan participants.


In conclusion, a 401(k) MEP offers a streamlined and cost-effective approach to retirement planning for small to medium-sized businesses. By understanding the roles and responsibilities of the various parties involved – including the employer sponsor, plan administrator, investment manager, recordkeeper, and fiduciaries – employers and employees can work together to build a strong foundation for financial security in retirement.

Not sure if a MEP is the right choice for your business? Read our guide: PEPs, MEPs and SEPs: What’s the Difference? so you can make an educated decision.

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