Multiple Employer Trust

Updated: 29 February 2024

What Does Multiple Employer Trust Mean?

A multiple employer trust (MET) is a trust formed by a group of more than ten employers who are in the same field. Entering into the trust allows them to minimize the tax implications of giving benefits to their employees such as life insurance, and to purchase group insurance at a reduced cost.

Insuranceopedia Explains Multiple Employer Trust

The U.S. Congress authorized the formation of METs in 1984 under Section 419(A) of the Internal Revenue Code. There are certain rules employers must abide by to qualify. For example, no single employer can contribute more than 10 percent of the total funding for the benefit plan purchased by the trust. Additionally, the MET must be an indivisible entity, meaning that all participating employers share equally in the benefits forfeited by other members of the group.

A MET is similar to a Multiple Employer Welfare Arrangement (MEWA). The main difference being that an MEWA is subject to the Employee Retirement Income Security Act of 1974 (ERISA). With a MET, unlike an MEWA, employees of each participating employer are considered employees of a single company and subject to the same overall regulations.

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