Labor Department finalizes pooled plan provider registration rule

The Department of Labor finalized a rule Thursday establishing requirements for registering as a pooled plan provider for pooled employer plans, known as PEPs.

The rule requires an initial registration filing and supplemental filings to report any changes, information about each specific pooled employer plan before initiating operations, and information on specified reportable events. It also requires a final filing once the last pooled employer plan has been terminated and ceased operations.

PEPs were created with the signing of the SECURE Act in December, which made it easier for employers in unrelated businesses to join open multiple employer retirement plans for their employees. Employers were previously discouraged from doing so because they would each still have to file separate Form 5500s and conduct separate annual audits, requirements that were eliminated with the new legislation.

PEPs will be available starting Jan. 1 and each PEP must have a pooled plan provider designated as a named fiduciary, plan administrator and the person responsible for specified administrative duties.

The SECURE Act stipulates that pooled plan providers must register with the Labor and Treasury departments before beginning operations. The rule, which was proposed in August, creates a new electronic form — EBSA Form PR — for interested parties to submit.

The rule requires pooled plan providers to register at least 30 days before beginning operations, although for the period of Nov. 25 to Jan. 31, the 30-day requirement is waived, provided registration occurs no later than the start of the plan, the Labor Department said. The new electronic filing system goes live Nov. 25.

In its final rule, the Labor Department outlined 11 pieces of information a prospective pooled plan provider would need to file on Form PR before beginning operations, including the approximate date when pooled plan operations are expected to begin; the address of any public website to be used to market its services or provide public information on a given PEP; a description of the administrative, investment and fiduciary services that will be offered; and statements disclosing any ongoing criminal, civil or administrative proceedings against the provider.

"Pooled employer plans will give employers, especially small unrelated employers, a way of offering their employees a workplace retirement savings option with reduced burdens and costs," said Jeanne Klinefelter Wilson, acting assistant secretary of labor for the Employee Benefits Security Administration, in a news release. "This final rule lays the groundwork for a sensible registration process so that providers can get pooled plans up and running."

The rule is effective upon its publication in the Federal Register.