Retirement plan service providers, plan sponsors and other industry stakeholders are pushing back against the Department of Labor's proposed registration requirements for pooled plan providers, the companies that will run the new pooled employer plans expected to start rolling out Jan. 1 under the SECURE Act.
In comment letters to the Department of Labor, industry participants argued that the proposed registration requirements go well beyond what was anticipated under the legislation and urged the agency to streamline the information required.
"We were thinking that the registration would just be a short registration with basically contact information," said Jan Jacobson, senior counsel, retirement policy, at the American Benefits Council in Washington.
The anticipated new plans — or PEPs — were established under the SECURE Act to make it easier for employers in unrelated businesses to join a collective or pooled retirement plan for their workforces, a move that would allow companies to reduce administrative duties and lower retirement plan costs through economies of scale as well as attract employers that currently do not offer plans. The breadth of the proposed registration requirements would erode some of the intended efficiencies and cost savings, some industry participants argued.
"You're running the risk that the costs would become too great and you wouldn't meet your original goal of encouraging more employers to have retirement plans," Ms. Jacobson said.
The comment period, which closed Oct. 1, drew 22 responses from record keepers, third-party administrators, consultants, and plan sponsor, broker-dealer and asset manager trade groups.
Among other things, the Labor Department is asking pooled plan providers to furnish a description of administrative and investment services that they will offer, including identification of any affiliates expected to have role in the provision of those services. It is also asking for disclosures of ongoing criminal, civil or administrative proceedings.