The Labor Department issued Wednesday a request for information on prohibited transactions involving Pooled Employer Plans, or PEPs, under the Setting Every Community Up for Retirement Enhancement (Secure) Act and other multiple-employer plans.
Labor’s Employee Benefits Security Administration will use the information provided in the RFI to decide whether to propose a new prohibited transaction class exemption.
Labor states that it’s seeking feedback on the possible parties, business models and conflicts of interest that respondents anticipate will be involved in the formation and ongoing operation of PEPs — multiple-employer retirement plans among employers that share no common interest.
The RFI also seeks information on similar issues involving multiple-employer plans sponsored by employer groups or associations or professional employer organizations.
A 30-day comment period will begin upon publication of the RFI in the Federal Register.
Acting Assistant Secretary of Labor for the EBSA Jeanne Klinefelter Wilson encouraged “all interested parties to submit comments in response to this request,” so that EBSA can evaluate the need for a proposal on a new exemption.
The Secure Act amended the Employee Retirement Income Security Act to allow for PEPs starting in 2021.
As Labor explains, “PEPs are required to designate a pooled plan provider that is a named fiduciary of the PEP. As a fiduciary, the pooled plan provider is subject to standards and restrictions in ERISA and the Internal Revenue Code, including the prohibited transaction provisions restricting fiduciaries of plans from engaging in conflict of interest transactions.”
— Check out Secure Act’s New Retirement Plans: MEPs, ARPs & PEPs on ThinkAdvisor.