Pension & Benefits News EBSA’s final rule specifies registration requirements for ERISA pooled plan providers
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Monday, December 14, 2020

EBSA’s final rule specifies registration requirements for ERISA pooled plan providers

By Pension and Benefits Editorial Staff

The Department of Labor’s Employee Benefits Security Administration (EBSA) has released a final rule establishing registration requirements for “pooled plan” providers under ERISA. The final rule implements the registration requirements for pooled plan providers pursuant to the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act). Pooled plan providers will be required to register electronically before beginning operations by submitting the new EBSA Form PR (Pooled Plan Provider Registration).

This final regulation affects persons wishing to serve as pooled plan providers, defined contribution plans that are operated as pooled employer plans, employers participating in these plans, and participants and beneficiaries covered by these plans.The final rule is effective November 16, 2020.

Pooled plans and providers. The SECURE Act amended ERISA and the Code to establish a new type of multiple employer plan called a “pooled employer plan.” Pooled employer plans must be administered by a “pooled plan provider.” These new pooled employer plans offer benefits to the employees of multiple unrelated employers without the need for any commonality among the participating employers or other genuine organizational relationship unrelated to participation in the plan. A pooled employer plan arrangement allows most of the administrative and fiduciary responsibilities of sponsoring a retirement plan to be transferred to a pooled plan provider.

As a result, a pooled employer plan can offer employers, especially small employers, a workplace retirement savings option with reduced burdens and costs as compared to sponsoring their own separate retirement plan, according to EBSA.

ERISA Sec. 3(44) establishes requirements for pooled plan providers, including a requirement to register with the Departments of Labor and Treasury before beginning operations as a pooled plan provider. The effective date for these provisions allows pooled employer plans to begin operating on January 1, 2021.

Electronic registration process. The final rule establishes a straightforward electronic registration process for businesses that want to offer pooled employer plans, according to EBSA. Except for November 25, 2020 to January 31, 2021, the process requires pooled plan providers to register at least 30 days before beginning operations.

Supplemental and final filings. Plans must also submit supplemental filings and a final filing after the provider’s last pooled employer plan has been terminated and ceased operations.

The supplemental filings are to report changes in the information in the initial filing, information about each specific pooled employer plan before initiation of operations, and information on specified reportable events. The final rule requires a supplemental filing for any changes in the previously reported registration information and for certain specified events within the later of 30 days after the calendar quarter in which the change or reportable event occurred or 45 days after a reportable event.

Pooled plan providers can file corrections and amendments of their initial registration and reportable event filings though the electronic filing system, according to EBSA. Inadvertent or good faith errors in registrations do not nullify a person’s status as a pooled plan provider, provided that a corrected or amended filing is submitted within a reasonable period of the discovery of the error or omission. If correcting only information previously reported, such as entry of an incorrect name for the agent for service of legal process, a person would indicate on the form that the filing is an amended filing, not a supplemental filing.

The final Form PR filing is due within the later of (a) 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 (b) 45 days after that filing.

The Department of Labor believes that the initial registration, supplemental filing, and final filing requirements, when combined with the Form 5500 annual reporting requirements, will give the DOL the timely access to pooled plan provider information needed to fulfill the monitoring and oversight tasks the SECURE Act placed on the agencies.

Note that the DOL expects to propose, through a separate rulemaking, new questions on the Form 5500 that would ask whether a pooled plan provider filed its registration statement with the Secretary, including any required updates, and to report the electronic confirmation number provided to the pooled plan provider at the time that the registration was received. These questions would be similar to the questions currently on the Form 5500 that require reporting by multiple employer group health plans about their compliance with registration and reporting requirements on the Form M-1 (Report for Multiple Employer Welfare Arrangements (MEWAs) and Certain Entities Claiming Exception (ECEs)).

Timeline exception. For the period of November 25, 2020 to January 31, 2021, the requirement to register at least 30 days prior to operating a pooled employer plan is waived, provided that registration occurs no later than the start of the plan. The final rule contains a special provision that allows an initial registration to be filed any time before February 1, 2021, provided that it is filed “on or before” the initiation of operations of a plan as a pooled employer plan. The effect of this provision is to waive the otherwise applicable 30-day waiting period between registration and the start of plan operations. This provision applies to pooled plan providers that initiate operations of a plan as a pooled employer plan on or after January 1, 2021 and before February 1, 2021.

DOL registration serves as Treasury registration. The Treasury Department will treat registration with the Department of Labor in accordance with the final regulation to satisfy the SECURE Act requirement to register with the Secretary of the Treasury.

Electronic system. The final regulation requires electronic filing of all pooled plan provider registrations with EBSA. EBSA is using the same electronic system for pooled plan providers to file the Form PR that plan administrators currently use to file the Form 5500.

The electronic system for EBSA Form PR was available on November 25, 2020, at https://www.efast.dol.gov/. An informational version of the new Form PR and instructions will be made available at https://www.dol.gov/agencies/ebsa soon.

“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,” Acting Assistant Secretary of Labor for the Employee Benefits Security Administration Jeanne Klinefelter Wilson said in a release. “This final rule lays the groundwork for a sensible registration process so that providers can get pooled plans up and running.”

Source: DOL News Release No. 20-2140-NAT.

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