The Savings Gap

‘Climate Right’ for Expanding Use of Multiple Employer Plans

Addressing the retirement savings-gap; A model plan for small employers

May 07, 2015 — WASHINGTON–(BUSINESS WIRE)–Prudential Retirement has issued its latest white paper “Multiple Employer Plans: Expanding Retirement Savings Opportunities,” at an Aspen Initiative on Financial Security in Washington, D.C.

Prudential Retirement started a fresh dialogue about the retirement coverage gap currently facing millions of Americans working for small employers. Prudential Retirement is a business unit of Prudential Financial, Inc. (NYSE:PRU).  Multiple employer plans (MEPs)—single plans providing benefits to the employees of two or more employers—have been utilized successfully for years by trade associations and professional employee organizations.

Unfortunately, current laws discourage or prevent most small employers from taking advantage of them. “Ignoring the current retirement coverage gap is a disservice to millions of hardworking Americans who need help preparing for retirement,” said Jaime Kalamarides, senior vice president, Institutional Investment Solutions, Prudential Retirement and one of the authors of the paper.

Improving Retirement Outcomes

“Making it easier for small employers to participate in MEPs would go a long way toward improving retirement outcomes.” “We are encouraged by the bipartisan support in both houses of the U.S. Congress for improving small employer access to MEPs,” said Prudential Financial’s Robert Doyle, vice president, Government Affairs.

“While a variety of solutions are possible, there appears to be a growing consensus that expanding MEP access could play a significant role in bringing retirement savings opportunities to millions more working Americans.

Prudential’s paper outlines features that a model multiple employer plan – or MEP – might incorporate, including:

  • Automatic enrollment of employees and automatic escalation of employee contributions
  • Automatic deferral of employee contributions into an investment option designed to preserve principal. After four years, contributions would be made to a qualified default investment alternative, such as a target-date fund
  • A lifetime income solution among the plan’s investment and/or distribution options
  • Streamlined administration through standardized plan design
  • Clear delineation of fiduciary and administrative responsibilities, ensuring that each plan is managed in the best interests of its participants and beneficiaries, with those responsibilities assumed by benefit and investment professionals rather than participating employers.
Making it easier for small employers to participate in MEPs would go a long way toward improving retirement outcomes

Prudential Retirement’s Bennett Kleinberg, vice president, Institutional Investment Solutions and the third author of “Multiple Employer Plan: Expanding Retirement Savings Opportunities,” said that “revamping current rules will not only help to close the retirement coverage gap, it will improve savings opportunities by affording employees of small employers access to professionally managed, institutionally priced retirement programs funded via convenient payroll deduction,” Kleinberg added.

“Employee access to retirement savings opportunities in workplace also makes small employers more competitive with larger employers who can more easily assume the costs and responsibilities associated with sponsoring a retirement plan.”



Prudential Retirement delivers retirement plan solutions for public, private, and nonprofit organizations. Services include defined contribution, defined benefit and non-qualified deferred compensation record keeping, administrative services, investment management, comprehensive employee education and communications, and trustee services, as well as a variety of products and strategies, including institutional investment and income products, pension risk transfer solutions and structured settlement services. With over 85 years of retirement experience, Prudential Retirement helps meet the needs of 4.0 million participants and annuitants. Prudential Retirement has $363.8 billion in retirement account values as of December 31, 2014.

Retirement products and services are provided by Prudential Retirement Insurance and Annuity Company (PRIAC), Hartford, CT, or its affiliates. Prudential Financial, Inc. (NYSE:PRU), a financial services leader with more than $1 trillion of assets under management as of December 31, 2014, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit