DOL issues proposed rule on pooled employer plans
The plan seeks to implement registration requirements for pooled plan providers under the Secure Act.
The Labor Department issued Thursday a notice of proposed rulemaking that seeks to implement the registration requirements for “pooled plan providers” pursuant to the Setting Every Community Up for Retirement Enhancement (Secure) Act of 2019.
The Secure Act amended the Employee Retirement Income Security Act and the Internal Revenue Code to establish a new type of multiple employer plan called a pooled employer plan (PEP) that must be administered by a person called a pooled plan provider.
The law allows pooled plan providers to start operating PEPs beginning on Jan. 1, 2021, but requires pooled plan providers to register with the Labor and Treasury secretaries before they begin operations, Labor explained.
“By allowing small businesses to pool their resources into plans, the rule proposed today will make cost-effective retirement options available to even more employees across the nation,” Labor Secretary Eugene Scalia said in a statement.
“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,” added Jeanne Klinefelter Wilson, head of Labor’s Employee Benefits Security Administration.
The plan, Klinefelter Wilson said, lays the groundwork for a streamlined registration process “so that providers can get pooled plans up and running” and establishes “straightforward requirements for pooled plan providers” to register with Labor.
The proposal, which includes both a mock-up of the required form and the instructions for the form, makes clear in the preamble that the Treasury Department and IRS intend to treat registration with the department in accordance with the final regulation to satisfy the SECURE Act requirement to register with the secretary of the Treasury.
Under the proposal, the registration process 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.
Consistent with the current trend toward electronic filing, the proposal requires electronic filing of the new Form PR.
The proposal explains that EBSA believes that the most efficient approach is to integrate the Form PR registration filing process into the current electronic filing system that employee benefit plans use utilize to file their Form 5500 Annual Return/Report.
The proposal will be out for a 30-day comment period and instructions for submitting comments are available through www.regulations.gov.
READ MORE: