The Employee Benefits Security Administration of the Department of Labor (DOL) issued new guidance and a request for information regarding Pooled Employer Plans (PEPs). PEPs are multiple unrelated retirement plans participating in a single plan structure operated by a Pooled Plan Provider (PPP).
The DOL has provided limited interpretive guidance regarding fiduciary responsibilities for small business owners participating in PEPs. According to this guidance, when a PPP has delegated investment and management functions to another fiduciary, participating employers are not responsible for prudent investment management, but they remain responsible for prudent monitoring of the PPP.
Pending additional guidance, the DOL prepared several tips to assist small business owners in selecting a PEP. These tips are highlighted below:
- Consider PPP experience and qualifications
- Customer satisfaction information
- Prior litigation or government enforcement matters
- Registered with the DOL
- Understand exposure to fiduciary liability
- Decision to join a PEP
- Responsibility, if any, to appoint a fiduciary for investment selection and monitoring
- Understand fees and expenses
- Fee descriptions and breakdowns
- Any compensation from third parties
- Fee allocation among participating employers and their employee accounts
- Consider investment options
- Level of diversification
- Performance in relation to their benchmarks
- Reevaluation frequency
- Consider what a PEP has to offer
- Professional management
- Economies of scale
- Understand PEP structure and operation
- Uniform features
- Available customization
- Establish ongoing monitoring
- Monitor at reasonable intervals
- Include a review of the PEP operations and performance
- Review exit provisions and restrictions
- Market value adjustments, if any
- How non-vested funds are handled
The DOL is requesting additional information to determine if additional guidance would be helpful. Along with some more general questions, specific requests for information include safe harbor considerations, potential conflicts of interest along with possible mitigation of such conflicts, and recommended improvements to the monitoring and evaluation of the PEP market. Comments must be identified by RIN 1210-AC10 and are due by September 29, 2025. They may be submitted using either of the following methods:
However, different rules apply for replacement checks that are $10 or more than the original check. The following must be reported on Form 1099-R:
- Online through the Federal eRulemaking Portal
- Mail: Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-5655, U.S. Department of Labor, 200 Constitution Avenue NW, Washington, DC 20210, Attn: Pooled Employer Plans: Big Plans for Small Business Regulation RIN 1210-AC10