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