What are SMEPs?

SMEPs are multi-employer pension plan that have more than 15 contributing employers and meet some additional conditions. For example, at no time in the year will more than 95 percent of the active members be employed by a single participating employer, or by a related group of participating employers.

What has changed?

Under the new law, all contributions remitted to the plan must accrue benefits. Consequently, SMEPs with defined benefit provisions that require contributions on behalf of members after the end of the year in which the member attains age 71, or on behalf of any other member in receipt of a pension from the plan are now prohibited from accepting those contributions.

This prohibition applies to contributions made under collectively bargained agreements negotiated after 2019.

Action items

This change will have a significant impact on the administration of SMEPs. Plan administrators will need to ensure they have measures in place to enforce the new restrictions.

Unions and employers that are currently negotiating new collective agreements should consider how these contributions will be handled. Similarly, boards of trustees should look at what changes may be required in their plan.