DOL finalizes pooled plan provider registration requirements

DOL finalizes pooled plan provider registration requirements

The Department of Labor (DOL) has finalized its regulation establishing registration requirements for providers offering “pooled employer plans.” These defined contribution (DC) retirement plans are open multiple-employer plans authorized by the Setting Every Community Up for Retirement (SECURE) Act of 2019 (Pub. L. No. 116-94). The final regulation adopts the proposed registration requirements without significant changes, but makes some tweaks to clarify registration deadlines and simplify reporting requirements. Pooled plan providers can offer pooled employer plans starting Jan. 1, 2021. Updates to this article reflect the Nov. 19 publication of the final Form PR, Registration for Pooled Plan Provider, and instructions.

Pooled plan providers

The SECURE Act allows employers of all sizes to join multiple-employer DC plans without requiring participating employers to share any commonality or other genuine organizational relationship unrelated to providing benefits. These new pooled employer plans are meant to help employers — especially small employers — by reducing the burdens and costs of offering employees a workplace retirement savings option.

A pooled plan provider is the plan administrator and named fiduciary for a pooled employer plan. The provider is responsible for performing most administrative and fiduciary functions for the plan. Employers retain only limited responsibility for selecting and monitoring the pooled plan provider, any other named fiduciaries and investment managers.

The SECURE Act requires pooled plan providers to register with both DOL and the Treasury Department and provide any information required by the agencies. The statute says providers must register “before beginning operations as a pooled plan provider” but does not specify any registration procedures or provider information requirements.

Regulatory registration requirements

The final rule lays out a two-part registration process:

  • An initial “registration” filing to report basic identifying information about the pooled plan provider and its structure, affiliated service providers, and any pending legal or regulatory proceedings
  • A supplemental filing to report each pooled employer plan before its operations start

Providers must also use supplemental filings to report any changes to information in earlier filings and any significant financial and operational events affecting the provider or any of its plans. The rule also requires a final filing after a provider has terminated all of its pooled employer plans and ceased operations as a pooled plan provider.

Initial registration

The initial registration is due at least 30 days before the pooled plan provider begins operating a pooled employer plan. The pooled plan provider initiates operations when the first participating employer executes or adopts an agreement to participate in the pooled employer plan or, if earlier, when the plan trustee first holds any asset in trust. DOL simplified this requirement from the proposal, which would have required initial registration at least 30 and no more than 90 days before the pooled plan provider offered a pooled employer plan or began publicly marketing its services. The change responds to comments that the proposal’s criteria were too vague to serve as triggers for initial registration.

Transition rule. The final regulation includes a special transition rule waiving the 30-day advance registration requirement for pooled plan providers that initiate plan operations on or before Feb. 1, 2021. Those providers need to file their initial registration on or before the date they start operating the plan.

Provider information. The initial registration must include the following information about the pooled plan provider:

  • Legal business name, any trade name (i.e., “doing business as”) and the EIN
  • Business address and telephone number for interested/participating employers and covered employees to request information (although the preamble to the proposed rule suggested a call center number couldn’t serve as the telephone number, DOL reversed this position in the final rule)
  • Public websites that the provider will use to market its services or provide plan information
  • Name, title or office; mailing and email addresses; and telephone number of the person responsible for responding to questions about the pooled plan provider’s status under or compliance with ERISA and the Internal Revenue Code requirements for pooled employer plans
  • Agent and address for serving legal process
  • Approximate date pooled employer plan operations are expected to start
  • Description of the administrative, investment and fiduciary services that the provider and any affiliate will offer or supply
  • Statement disclosing either of the following about the pooled plan provider or any of its officers, directors or employees:

─     Federal or state criminal conviction within 10 years of registration, if related to services, operations or investments handled for any employee benefit plan

─     Ongoing criminal, civil or formal administrative proceedings initiated by the federal or a state government or another regulatory authority that involve any fraud or dishonesty with respect to any employee benefit plan or mismanagement of plan assets

Supplemental filing and event disclosures

By the date a pooled employer plan’s operations start, the provider must submit a supplemental registration filing that includes the plan name, number, and trustee’s name, address and EIN. Providers will also need to disclose certain events within 30 days of the end of the calendar quarter in which the event occurred or, if later, 45 days after the event. These events include:

  • Any change in the previously reported registration information (including termination of any of the provider’s pooled employer plans)
  • Significant change in the provider’s corporate or business structure (for example, a merger or acquisition)
  • Initiation of a bankruptcy, receivership or another insolvency proceeding for the pooled plan provider or any affiliate providing services to a pooled employer plan, or the cessation of all operations as a pooled plan provider
  • Receipt of written notice of any of the following actions against the pooled plan provider or any of its officers, directors or employees:

─     Initiation of any administrative proceeding or civil enforcement action — in any court or administrative tribunal — by any federal or state governmental agency or other regulatory authority, if the action involves a claim of fraud or dishonesty with respect to any employee benefit plan or mismanagement of plan assets

─     Finding of fraud, dishonesty or mismanagement of plan assets by a federal or state court or a federal or state governmental agency

─     Filing of any federal or state criminal charges related to services, operations or investments handled for any employee benefit plan

A pooled plan provider can use a single filing to report multiple simultaneous changes or a change that applies to all of its pooled employer plans.

Final filing

Pooled plan providers must submit a final filing after they have ceased operating all pooled employer plans. The final filing is due within 30 days of the end of the calendar quarter in which the provider files the final Form 5500 for the last pooled employer plan operated, or if later, within 45 days of that filing. The provider also must file the supplemental registration statement discussed above to report the termination of each of its pooled employer plans. The rule allows a single filing to report termination of the last pooled employer plan and cessation of all operations as a pooled plan provider.

Form PR

Pooled plan providers must submit all registrations and supplemental filings to DOL’s Employee Benefit Security Administration (EBSA) using a new Form PR (Pooled Plan Provider Registration). Filing EBSA Form PR satisfies the SECURE Act’s requirements to register with Treasury as well. Once a registration statement is filed, the data will be available to the public on DOL’s website.

Amended filings. The filing system allows pooled plan providers to correct or amend their registration and supplemental filings. Inadvertent or good-faith errors and omissions generally won’t invalidate a registration, as long as the provider submits a corrected or amended filing within a reasonable period after discovering the error or omission. The instructions to the Form PR don’t provide any additional details about what timeframe would be reasonable. (In contrast, the proposed form would have required providers to submit amended filings within 30 days of discovering an error, but no later than the Form 5500 due date if identifying information might differ between the two forms.)

Electronic filing. All initial and supplemental registrations must be filed electronically using EFAST2, the same system that plan administrators currently use to file the Form 5500.

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Brian Kearney
by Brian Kearney

Principal, Mercer’s Law & Policy Group

Margaret Berger
by Margaret Berger

Principal, Mercer’s Law & Policy Group

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