MEPs, PEPs & PPPs
At the start of 2021, the Setting Every Community Up for Retirement Enhancement (SECURE) Act’s much-anticipated pooled employer plans (PEPs) became official.
As of Jan. 1, 2021, registered pooled plan providers (PPPs) can begin offering PEPs, allowing unrelated employers to participate in the same retirement plan without having to meet any common nexus requirement that had been the standard for multiple employer plans (MEPs).
Among other things, the SECURE Act eliminated the commonality requirement and the one bad apple rule, and now allows two or more unrelated employers to join a PEP that is offered and managed by a PPP, requiring only a single plan document, and allowing streamlined audit and Form 5500 reporting requirements.
The legislation also specified that the designated PPP must be a named fiduciary and must be responsible as the ERISA Section 3(16) plan administrator. It also increases the ERISA bond limits to $1 million. In addition, each adopting employer will maintain responsibility for the selection and monitoring of the PPP or any other named fiduciary.
Before a PPP can start offering and operating PEPs, however, they must register with the Labor and Treasury departments. Under a final rule issued in November 2020, PPPs are required to register at least 30 days before beginning operations by electronically submitting a new EBSA Form PR. In fact, many firms have already announced that they plan to offer PEPs, and have been registering with the Department of Labor.
But while the Labor Department released a final rule on the PPP registration requirements, there still has been no final guidance issued by the DOL and IRS fleshing out the details on the employer and PPP responsibilities, including administrative duties, how to address noncompliant employers and the new reporting requirements.
In the meantime, the final rule on the registration requirements advised that an employer or PPP will not be treated as failing to meet a requirement of guidance if the employer or PPP complies in good faith with a reasonable interpretation of the provisions before the issuance of such guidance.
As more firms gear up to register as a PPP and more employers consider whether to join a PEP, we have created this resource page that includes links to the legislation, related regulatory guidance, our news coverage and comment letters, and various other resources.
ARA Comment Letters
ARA Comment Letter on Proposed PPP Registration Requirements (Oct. 1, 2020)
ARA Comment Letter Responding to EBSA’s June 2020 RFI on PEPs and Other MEPs (19 pages, July 20, 2020)
PEPs—Relief from ERISA’s Prohibited Transaction Rules (8 pages, June 9, 2020)
NAPA News Coverage
Browse our news posts and commentary concerning the creation and implementation of Pooled Employer Plans under the SECURE Act.
Visit our SECURE Act resource page for additional related legislative documents, our news coverage and various recommended resources.
Proposed Rules on Reporting Requirements for Groups of Plans (DOL, IRS and PBGC, Sept. 15, 2021)
DOL Final Rule on PPP Registration Requirements (Nov. 16, 2020)
DOL EFAST Filing System (to be used to file Form PR to register as a Pooled Plan Provider)
DOL EFAST Search Tool (to see which companies have filed to be PPPs)
DOL Sample Form PR and Instructions (Nov. 19, 2020)
DOL Announces Registration Requirements for PPPs (Nov. 12, 2020)
Proposed Rule on PPP Registration Requirements (Sept. 1, 2020)
RFI on Prohibited Transactions Involving PEPs and Other MEPs (June 18, 2020)
IRS Proposed Regulations (July 3, 2019; to provide exception to “one bad apple” rule for certain MEPs; issued prior to SECURE Act)
Further Consolidated Appropriations Act, 2020 (see Division O for SECURE Act; the MEPs/PEPs provision begins on page 605 of 715)
Industry Analysis and Commentary
PEPs: Investment Lineups & Offerings (Tom Cassara & Alec Constanza, River and Mercantile, July 29, 2022)
Small Employers Interested in Learning More About PEPs, Not Yet Ready to Implement (LIMRA Secure Retirement Institute, May 4, 2022)
The Spcial MEP Unified Plan Rule—Kicking Out the Rotten Apple after SECURE (Ferenczy Benefits Law Center, March 29, 2022)
A Rumor of the Death of GoPs (Pete Swisher, Sept. 15, 2021)
The Limited Utility of the "One Bad Apple" Rule Fix (Robert Toth on the Business of Benefits blog, Aug. 16, 2021)
Joining a PEP is easy, joining the "right" PEP... not so fast my friend (Voya Financial, Aug. 10, 2021)
Pooled Employer Plans—Employer Considerations (American Academy of Actuaries, May 2021)
To PEP or not to PEP... that is the Question? (Enterprise Iron Financial Industry Solutions, Inc., April 2021)
“Plan Aggregation” Update: Find Pooled Plan Providers In E-Fast2; SECURE Act Section 202’s “Group of Plans” Comes to the Forefront (Bob Toth, “Business of Benefits” blog, March 1, 2021)
MEP, PEP, or Stand Alone Plan, Which Is the Best Fit for Your Company? (DWC—The 401k Experts, Feb. 18, 2021)
DOL Releases Final Rule for Pooled Plan Provider Registration (Ascensus, Dec. 9, 2020)
Pooled vs. Single-Employer 401(k) Plans—Are PEPs for You? (Employee Fiduciary, Dec. 9, 2020)
Pooled Employer Plans Are Nearly Upon Us: A Review of the Glossary May Help with Your Assessment (Robert Toth, Dec. 7, 2020)
DOL Finalizes Pooled Plan Provider Registration Requirements (Mercer, Nov. 20, 2020)
The Race to Register: DOL Issues Final Rule on PPP Registration (Groom Law Group, Nov. 17, 2020)
PEP Talk (NAPA Net the Magazine, Fall 2020)
Pooled Employer Plans: The Benefits & Considerations for Employers (Lockton, Oct. 8, 2020)
Pooled Employer Plans—Where Do We Stand? (ASC, Sept. 20, 2020)
Look Before You Leap: MEPs Now a Target of Fee Litigation (Boutwell Fay, September 2020)
SEP, MEP, or PEP: Identifying the Key Differences in Retirement Plans (Ferenczy Law, Aug. 10, 2020)
Pooled Employer Plans—FAQs for U.S. Employers (Mayer Brown, Aug. 6, 2020)
Will PEPs Address the Retirement Plan Woes of Small Employers? (Morningstar, July 22, 2020)
MEPs and Participating Employers Given the Opportunity to Contribute to Guidance Development on PEPs under the SECURE Act (Wagner Law Group, July 1, 2020)
Are Two Employers Better than One? An Empirical Assessment of Multiple-Employer Retirement Plans (SSRN Paper, May 1, 2020)
PEPs Are Almost Here—Now What? (David Levine in NAPA Net the Magazine, April 2020)
So You Want to Sponsor a Pooled Employer Plan? Here Are 5 Things to Know (Groom Law Group, Jan. 9, 2020)
Secure Act Increases Access to Retirement Plans with Pooled Employer Plans (Morgan Lewis, Dec. 26, 2019)
MEPs: How Do Advisors Fit In? (David Levine in NAPA Net the Magazine, November 2018)