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U.S. Department of Labor
Employee Benefits Security Administration
August 20, 2020

On August 20, 2020, the U.S. Department of Labor (Department) announced a notice of proposed rulemaking (NPRM) on pooled plan provider registration, including a proposed EBSA Form PR and instructions. The proposal is intended to implement the registration requirements for “pooled plan providers” pursuant to the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act).

America’s workers in small and mid-size businesses have had limited options when it comes to employer-based retirement plans.

  • According to a 2018 study by the U.S. Bureau of Labor Statistics, approximately 38 million private-sector employees in the United States do not have access to a retirement savings plan through their employers.
    • Approximately 85% of workers at private-sector establishments with 100 or more workers were offered a retirement plan.
    • In contrast, only 53% of workers at private-sector establishments with fewer than 100 workers had access to such plans.
  • A survey by the Pew Charitable Trusts found that only 53% of small-to mid-sized businesses offer a retirement plan; 37% of those not offering a plan cited cost as a reason.

The SECURE Act offers a solution.

  • A goal of the SECURE Act is to increase retirement savings, in particular by expanding options for small employers to participate in multiple employer plans (MEPs).
  • The SECURE Act amended the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (Code) to establish a new type of MEP called a “pooled employer plan” (PEP).
  • A PEP permits unrelated employers of all sizes to participate or join the PEP without the need for any commonality among the participating employers.
  • By allowing most of the management and administrative responsibilities of sponsoring a retirement plan to be transferred to a pooled plan provider, PEPs will give employers, especially small unrelated employers, a way to offer their employees a workplace retirement savings option with reduced burdens and costs compared to sponsoring their own separate retirement plan.
  • The SECURE Act requires that PEPs be administered by a “pooled plan provider.”
  • The SECURE Act does not limit the class of persons who can act as pooled plan providers, but it is expected that financial services companies (such as insurance companies, banks, and record keepers) or their affiliates will be sponsors of pooled employer plans.
  • The SECURE Act allows pooled plan providers to start operating PEPs as early as January 1, 2021, but also requires pooled plan providers to register with the Secretary of Labor and the Secretary of the Treasury prior to beginning operations.

Proposed rule would establish a simple and efficient electronic registration process to implement the SECURE Act and facilitate PEPs.

  • The NPRM, if implemented, would establish a simple registration process for businesses that want to offer PEPs.
  • The NPRM also would provide a source of information for companies that want to join PEPs as a way to offer their workers access to a workplace retirement savings vehicle.
  • The NPRM’s registration process entails a simple form that would be filed electronically with the Department. The Department intends to have the electronic filing system operational as soon as possible so that PEPs may begin to operate as early as January 1, 2021.
  • The NPRM would require the registrant to report only mission-critical information – requiring more information than that would drive up compliance costs unnecessarily, and anything less than that might fail to protect the retirement savings of plan participants.

PEPs have many possible benefits.

  • The simple registration process is expected to make it easier for businesses that seek the opportunity to become pooled plan providers and offer PEPs, thereby expanding the PEP universe.
  • Expanding access to PEPs would allow small and mid-size businesses to obtain the economies of scale for administrative costs and investment choices currently enjoyed by large employers.
  • Participating in a PEP would lower costs and decrease the regulatory burden and fiduciary liability on small and mid-size businesses.

Overview of the Notice of Proposed Rulemaking.

  • The NPRM (along with a proposed mock-up of a form and instructions) would establish requirements for pooled plan providers to register with the Department. Registration with the Department would satisfy the SECURE Act requirement to register with the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS).
  • The registration process under the NPRM would involve an initial registration, supplemental filings regarding specific reportable events, and a final filing after the provider’s last PEP has been terminated and ceased operations.
  • The initial registration would have to be filed by the registrant no sooner than 90 days before and no later than 30 days before it begins operating (defined as marketing or publicly offering a PEP) as a pooled plan provider.
  • An important purpose of the requirement to register before beginning operations as a pooled plan provider is to provide the departments, prospective employer customers, and the public with notice and relevant information about the pooled plan provider. The initiation of public marketing services as a pooled plan provider or public offering of one or more PEPs are the triggers for registering.
  • The initial registration would include identifying information about the provider, certain basic information about the services to be provided, the role of affiliates expected to provide services, identification information for the provider’s compliance officer, name and address of agent for service of process, and information on the existence of civil, criminal, or administrative actions relevant to the provider’s operation of employee benefit plans.
  • Pooled plan providers would have to submit a supplemental filing for each new PEP before the PEP begins operation, unless the PEP was identified in the provider’s initial registration statement.
  • Other supplemental reportable event filings would have to be made within 30 days of any change in the information provided in the initial registration, and within 30 days of certain key events such as any significant changes in corporate structure, initiation of bankruptcy proceedings, or receiving written notice of the initiation of any administrative or enforcement action against the pooled plan provider or any officer, director, or employee of the pooled plan provider, related to the provision of services to, operation of, or investments of any PEP.
  • If a pooled plan provider has ceased operating all PEPs, the provider would be required to file a final registration filing within 30 days of filing the final Form 5500 for the last pooled employer plan the provider operates.
  • The NPRM also includes a mock-up of the EBSA Form PR and instructions. Form PR would be the required vehicle for pooled plan provider registration filings.

Electronic Filing System

  • The NPRM would require electronic filing of the Form PR. The most efficient approach is to integrate the Form PR filing processes into the current electronic filing system employee benefit plans use to file their Form 5500 Annual Return/Report. This current filing system uses the all-electronic ERISA Filing and Acceptance System or “EFAST2” designed by the Department, IRS, and PBGC to simplify and expedite the submission, receipt, and processing of the Form 5500 filings.

Public Comment Period

  • The NPRM includes a 30-day comment period and instructions for submitting comments Public comments can be submitted electronically to the Federal eRulemaking portal at www.regulations.gov. All comments received will be available to the public, without charge, online at www.regulations.gov and www.dol.gov/agencies/ebsa and in the EBSA Public Disclosure Room. The Department invites comments from interested persons on all facets of the NPRM, while also soliciting comments on several specific issues. For example, the NPRM asks for comments on information, data, and ideas on ways the registration statement could be easier to complete, better coordinated with other required disclosures, and more helpful for participating employers and their workers. It also asks whether the Department should consider any transition period or transition provisions for implementation of the registration requirements.

Contact Information

For questions about the NPRM, contact EBSA’s Office of Regulations and Interpretations at 202-693-8500.