DOL Issues Final Rule Providing Registration Requirements for Pooled Plan Providers | Practical Law

DOL Issues Final Rule Providing Registration Requirements for Pooled Plan Providers | Practical Law

The Department of Labor (DOL) released a final rule that provides registration requirements for pooled plan providers of pooled employer plans, as authorized under the Setting Every Community Up for Retirement Enhancement Act (SECURE Act).

DOL Issues Final Rule Providing Registration Requirements for Pooled Plan Providers

Practical Law Legal Update w-028-3526 (Approx. 4 pages)

DOL Issues Final Rule Providing Registration Requirements for Pooled Plan Providers

by Practical Law Employee Benefits & Executive Compensation
Published on 16 Nov 2020 • USA (National/Federal)
The Department of Labor (DOL) released a final rule that provides registration requirements for pooled plan providers of pooled employer plans, as authorized under the Setting Every Community Up for Retirement Enhancement Act (SECURE Act).
On November 12, 2020, the DOL released a final rule that provides registration requirements for pooled plan providers of pooled employer plans under the SECURE Act. The DOL also issued an accompanying press release.
The SECURE Act amended ERISA to establish a new type of multiple employer plan (MEP) known as the pooled employer plan, which allows unrelated employers to join together to participate in one MEP (see Practice Note, Multiple Employer Retirement Plans (MEPs): Pooled Employer Plans Under SECURE Act). A pooled employer plan must be administered by a pooled plan provider, who will serve as a named fiduciary of the plan.
Under the SECURE Act, pooled plan providers:
  • May start operating pooled employer plans on January 1, 2021.
  • Are required to register with the Secretary of Labor and the Secretary of the Treasury before they begin operations.
The DOL issued a proposed rule providing registration requirements for pooled plan providers of pooled employer plans in August 2020 (see Legal Update, DOL Issues Proposed Registration Requirements for Pooled Plan Providers).

Final Rule

The final rule adopts the structure of the proposed rule with several minor changes.

Reporting

The final rule specifies how pooled plan providers will register with the DOL. Pooled plan providers that register with the DOL according to the final rule will satisfy the SECURE Act's requirement to also register with the Treasury Department.

Initial Registration

The final rule establishes a reporting structure for pooled plan providers that includes an initial registration filing providing basic information about the pooled plan provider. Under the final rule, registration is required upon the operation of a pooled employer plan, rather than, as was required in the proposed rule, publicly marketing services as a pooled plan provider or publicly offering a pooled employer plan.
Under the proposed rule, the initial registration statement would have been due at least 30 days, but no more than 90 days, before operating as a pooled plan provider. The final rule eliminated the 90-day requirement and simply requires the filing of an initial registration at least 30 days before a plan's initiation of operations as a pooled employer plan.
The final rule also will allow an initial registration to be filed at any time before February 1, 2021, if it is filed "on or before" the initiation of operations of a plan as a pooled employer plan. This provision:
  • Waives the otherwise applicable 30-day waiting period between registration and the start of plan operations.
  • Applies to pooled plan providers that would initiate operations of a plan as a pooled employer plan on or after January 1, 2021, and before February 1, 2021.
The initial registration will be submitted using a new form, EBSA Form PR (Pooled Plan Provider Registration). The final rule includes several minor changes regarding the information that a prospective pooled plan provider will have to include on Form PR. As listed in the preamble to the final rule, there are 11 categories of information included in Form PR.

Other Reporting Requirements

The final rule's reporting structure for pooled plan providers also requires:
  • Supplemental filings to report changes in information in the initial registration filing.
  • Providing information about each pooled employer plan before initiating operations.
  • Notifying the DOL of specific reportable events related to the pooled plan provider and the plans it sponsors, including significant financial and operational events. The final rule made minor changes to the proposed rule's reporting requirements for these events.
  • A final filing once the pooled plan provider has ceased operating all pooled employer plans. The final Form PR filing is due within the later of:
    • 30 days after the calendar quarter in which the final Form 5500 for the last pooled employer plan operated by the pooled plan provider was filed; or
    • 45 days after that filing.

Electronic Filing

The final rule requires all pooled plan provider registrations to be electronically filed with the DOL, and corrections and amendments to the registration and reportable event filings must be done electronically, as well.

Form 5500

The preamble to the final rule states that the DOL will propose in a separate rulemaking new questions for the Form 5500 that would ask whether a pooled plan provider filed its registration statement with the DOL.

Effective Date

The final rule is effective immediately, rather than taking effect after a 30-day delay as is customary under the Administrative Procedure Act, because pooled plan providers can begin operating on January 1, 2021, only if they first register with the DOL, and having a 30-day delay in the final rule's effective date would make start-up obligations more difficult and may impede a pooled plan provider's contractual obligation to begin operating a plan on that date.

Practical Implications

Pooled plan providers should familiarize themselves with the reporting requirements provided by the final rule.