What Is a Multiple Employer Plan (MEP) — and Why More Employers Are Moving Away from Single-Employer Retirement Plans

A Multiple Employer Plan (MEP) is a shared retirement plan that allows multiple, unrelated employers to participate in one centrally administered plan instead of managing separate single-employer 401(k)s. As costs rise, fiduciary responsibilities grow, and participation gaps persist, more small and mid-sized businesses are rethinking how they offer retirement benefits.

• Rising employer interest: Mercer research shows 36% of employers with single-employer plans are considering a move to an MEP or Pooled Employer Plan “PEP”, with another 31% open to switching in the future.  PEP’s are similar to MEP’s in that unrelated employers can participate in a single plan. 
• Persistent participation challenges: Vanguard data indicates more than 40% of eligible small-business employees do not participate in their employer’s retirement plan.
• Lower costs through scale: MEPs pool participants across employers to reduce administrative fees and negotiate more competitive investment pricing.
• Reduced fiduciary and administrative burden: Centralized plan sponsorship shifts much of the compliance, governance, and oversight responsibility away from individual employers.
• Access to modern plan design: Features like automatic enrollment, automatic escalation, and faster eligibility are easier to implement at scale and are proven to increase participation.

Together, these factors are driving a broader shift toward MEPs as a more efficient, modern retirement solution for small and mid-sized businesses.

Understanding Multiple Employer Plans (MEPs)

Small and mid-sized businesses are rethinking how they offer retirement benefits. Rising administrative costs, growing fiduciary complexity, and persistent employee participation gaps are forcing employers to ask a hard question: Is our current retirement plan actually working?

 Together, these signals point to a broader shift in how employers think about retirement benefits — and why MEPs are gaining traction.

How can TriNet Help?

TriNet sponsors a multiple employer plan for which their customers can become an adopting employer.  A TriNet sponsored multiple employer plan enables small and mid-sized businesses access to top-tiered retirement plan features, scale, and governance that were historically available only to larger employers.

Why Employers Are Moving Toward MEPs

1. Lower Costs Through Scale

One of the biggest advantages of an MEP is economies of scale. By pooling participants across many employers, MEPs can often:

• Reduce administrative fees
• Negotiate more competitive investment pricing
• Generally lower per-participant costs compared with single-employer plans

In the Mercer survey, 29% of employers said they are using or considering MEP or PEP structures specifically as a way to reduce costs — a meaningful signal in an environment where benefit expenses continue to rise.

2. Reduced Fiduciary and Administrative Burden

Running a retirement plan isn’t just about offering a benefit — it comes with ongoing responsibilities:

• Investment selection and monitoring
• Regulatory compliance
• Ongoing reporting and disclosures
• Managing service providers

For smaller employers in particular, improving governance and fiduciary oversight ranked as a top priority in the Mercer research  . MEPs help by shifting much of that burden to a centralized sponsor structure, allowing employers to offer a robust benefit without taking on full administrative complexity.

3. Easier Access to Modern Plan Design Features

Many employers struggle to implement plan features that actually drive employee participation, such as:

• Automatic enrollment
• Automatic escalation of deferral rates
• Immediate or faster eligibility

 MEPs often make it easier to implement modern plan design at scale, helping employers close the participation gap without custom-building a plan from scratch.

Why MEPs Are Attractive to Employees

From an employee’s perspective, MEPs can deliver a better retirement experience:

• Simpler enrollment with auto-features that remove friction
• Lower investment fees, improving long-term outcomes
• More institutional-quality investment lineups
• Greater confidence that the plan is well-governed and professionally managed

When employees perceive a retirement plan as easy, trustworthy, and valuable, participation tends to follow.

The Bigger Picture: What the Research Is Really Telling Us

The Mercer and Vanguard findings point to a shared reality:

• Employers want simpler, more efficient ways to offer competitive retirement benefits
• Employees need better plan design to overcome inertia and build long-term savings

MEPs are no longer a niche solution . They are becoming a strategic response to rising costs, governance concerns, and employee retirement readiness challenges.

Why This Matters Now for Small and Mid-Sized Businesses

As competition for talent increases and financial wellness becomes a stronger differentiator, retirement benefits are under more scrutiny than ever. Employers that continue to rely on outdated single-employer plans may find themselves:

• Paying more than necessary
• Offering plans employees don’t use
• Carrying unnecessary fiduciary risk

MEPs offer a way forward — enabling SMBs to provide a scalable, modern retirement benefit that aligns employer efficiency with employee outcomes.

The Bottom Line

MEPs aren’t just a cost-saving mechanism. They represent a shift toward simpler administration, stronger governance, and better participant outcomes. With rising interest from employers and clear evidence that traditional plans aren’t driving participation, MEPs are poised to play a central role in the future of retirement benefits for small and mid-sized businesses.

For employers looking to offer competitive benefits without adding complexity, that shift may already be underway.