Multiple Employer Trust

What Does Multiple Employer Trust Mean?

A multiple-employer trust (MET) is a trust formed by a group of more than ten employers within the same field. By joining the trust, employers can minimize the tax implications of providing benefits such as life insurance to their employees and purchase group insurance at a reduced cost.

Insuranceopedia Explains Multiple Employer Trust

The U.S. Congress authorized the formation of Multiple Employer Trusts (METs) in 1984 under Section 419(A) of the Internal Revenue Code. Employers must follow certain rules to qualify, such as ensuring that no single employer contributes 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 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), with the main difference being that MEWAs are subject to the Employee Retirement Income Security Act of 1974 (ERISA). In contrast, with a MET, employees of each participating employer are considered employees of a single entity and are subject to the same overall regulations.