Registration Requirements for Pooled Plan Providers, 72934-72956 [2020-25170]

Agencies

• Employee Benefits Security Administration
• DEPARTMENT OF LABOR

[Federal Register Volume 85, Number 221 (Monday, November 16, 2020)]
[Rules and Regulations]
[Pages 72934-72956]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-25170]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2510

RIN 1210-AB94


Registration Requirements for Pooled Plan Providers

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Final rule.

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[[Page 72935]]

SUMMARY: This final regulation establishes the requirements for 
registering with the Department of Labor as a ``pooled plan provider'' 
for ``pooled employer plans'' under the Employee Retirement Income 
Security Act of 1974, as amended (ERISA). The Setting Every Community 
Up for Retirement Enhancement Act of 2019 (SECURE Act) provides that 
newly permitted pooled plan providers can begin offering pooled 
employer plans on January 1, 2021, but requires such persons to 
register with the Secretary of Labor before beginning operations. This 
final regulation also establishes a new form--EBSA Form PR (Pooled Plan 
Provider Registration)--as the required filing format for pooled plan 
provider registrations. The Form PR must be filed electronically with 
the Department of Labor. Filing the Form PR with the Department of 
Labor also satisfies the SECURE Act requirement to register with the 
Department of the Treasury. This final regulation affects persons 
wishing to serve as pooled plan providers, defined contribution pension 
benefit plans that are operated as pooled employer plans, employers 
participating in such plans, and participants and beneficiaries covered 
by such plans.

DATES: This final regulation is effective on November 16, 2020.

ADDRESSES: Form PR and the accompanying instructions are the required 
filing format for pooled plan provider registrations and the Form PR 
must be filed electronically with the Department of Labor at https://www.efast.dol.gov/.

FOR FURTHER INFORMATION CONTACT: Colleen Brisport Sequeda, Office of 
Regulations and Interpretations, Employee Benefits Security 
Administration, U.S. Department of Labor, (202) 693-8500 (this is not a 
toll-free number), for questions related to pooled plan provider 
reporting requirements under Title I of ERISA.
    Customer service information: Individuals interested in obtaining 
general information from the Department of Labor concerning Title I of 
ERISA may call the EBSA Toll-Free Hotline at 1-866-444-EBSA (3272) or 
visit the Department's website (www.dol.gov/agencies/ebsa).

SUPPLEMENTARY INFORMATION:

I. Legal Framework

    Under ERISA, an employee benefit plan (whether a pension plan or a 
welfare plan) must be sponsored by an employer, by an employee 
organization, or by both. Section 3(5) of ERISA defines the term 
``employer'' for this purpose as ``any person acting directly as an 
employer, or indirectly in the interest of an employer, in relation to 
an employee benefit plan, and includes a group or association of 
employers acting for an employer in such capacity.'' These definitional 
provisions of ERISA have been interpreted as permitting a multiple 
employer plan (MEP) to be established or maintained by a bona fide 
group or association of employers that is controlled by the employer 
members and that acts in the interests of its employer members to 
provide benefits to their employees.\1\ This approach is based on the 
premise that the person or group that maintains the plan is tied to the 
employers and employees that participate in the plan by some common 
economic or representational interest or genuine organizational 
relationship unrelated to the provision of benefits. The Department of 
Labor (Department) has taken steps, through a final rule on 
``association retirement plans'' at 29 CFR 2510.3-55, to clarify and 
expand the types of arrangements that can be treated as multiple 
employer plans under Title I of ERISA. That final rule did not, 
however, extend to so-called ``open MEPs.'' \2\
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    \1\ The SECURE Act did not change the conditions for plans that 
were already permitted under section 3(2) of ERISA to act as a 
single MEP. See, e.g., Advisory Opinions 2008-07A, 2003-17A, and 
2001-04A. Those classes of multiple employer plans (e.g., employer 
association retirement plans and plans sponsored by professional 
employer organizations) are outside of the scope of this rulemaking, 
as are multiple employer plans established and maintained pursuant 
to bona fide collective bargaining.
    \2\ See the preamble discussion in the Final Rule on the 
Definition of ``Employer'' Under Section 3(5) of ERISA--Association 
Retirement Plans and Other Multiple-Employer Plans, 84 FR 37508 
(July 31, 2019). The Department did, however, seek comments through 
a Request for Information published with that proposed rule seeking 
comments on whether, and if so under what conditions, open MEP 
structures should be treated as a multiple employer plan for 
purposes of Title I of ERISA.
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    The Setting Every Community Up for Retirement Enhancement Act of 
2019 (SECURE Act) \3\ removed possible legal barriers to the broader 
use of multiple employer plans by authorizing a new type of ERISA-
covered defined contribution plan--a ``pooled employer plan'' operated 
by a ``pooled plan provider.'' The SECURE Act amended section 3(2) of 
ERISA to authorize these pooled employer plans, which 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, 
thus enabling a type of open MEP. 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. Therefore, a pooled employer plan can offer employers, 
especially small employers, a workplace retirement savings option with 
reduced burdens and costs compared to sponsoring their own separate 
retirement plan. New section 3(44) of ERISA establishes requirements 
for pooled plan providers, including a requirement to register with the 
Department and the Department of the Treasury (Treasury Department) 
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.
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    \3\ The SECURE Act was enacted as Division O of the Further 
Consolidated Appropriations Act, 2020 (Pub. L. 116-94) (December 20, 
2019).
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    Under section 3(2) of ERISA, a pooled employer plan is treated for 
purposes of ERISA as a single plan that is a multiple employer plan. A 
pooled employer plan is generally defined in section 3(43) as a 
qualified retirement plan that is an individual account plan or a plan 
that consists of individual retirement accounts described in Internal 
Revenue Code (Code) section 408 that is established or maintained for 
the purpose of providing benefits to the employees of two or more 
employers, the terms of which meet certain requirements set forth in 
the statute.\4\ Specifically, the terms of the plan must:
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    \4\ 29 U.S.C. 1002(43)(B). The term ``pooled employer plan'' 
does not include a multiemployer plan or plan maintained by 
employers that have a common interest other than having adopted the 
plan. The term also does not include a plan established before the 
date the SECURE Act was enacted unless the plan administrator elects 
to have the plan treated as a pooled employer plan and the plan 
meets the ERISA requirements applicable to a pooled employer plan 
established on or after such date.
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     Designate a pooled plan provider and provide that the 
pooled plan provider is a named fiduciary of the plan;
     designate one or more trustees (other than an employer in 
the plan) to be responsible for collecting contributions to, and 
holding the assets of, the plan, and require the trustees to implement 
written contribution collection procedures that are reasonable, 
diligent, and systematic;
     provide that each employer in the plan retains fiduciary 
responsibility for the selection and monitoring, in accordance with 
ERISA fiduciary requirements, of the person designated as the pooled 
plan provider and any other person who is designated as a named 
fiduciary of the plan, and the investment and management of the portion 
of the plan's assets attributable

[[Page 72936]]

to the employees of that employer (or beneficiaries of such employees) 
in the plan to the extent not delegated to another fiduciary by the 
pooled plan provider and subject to the ERISA rules relating to self-
directed investments;
     provide that employers in the plan, and participants and 
beneficiaries, are not subject to unreasonable restrictions, fees, or 
penalties with regard to ceasing participation, receipt of 
distributions, or otherwise transferring assets of the plan in 
accordance with applicable rules for plan mergers and transfers;
     require the pooled plan provider to provide to employers 
in the plan any disclosures or other information that the Secretary of 
Labor may require, including any disclosures or other information to 
facilitate the selection or monitoring of the pooled plan provider by 
employers in the plan;
     require each employer in the plan to take any actions that 
the Secretary of Labor or pooled plan provider determines are necessary 
to administer the plan or to allow for the plan to meet the ERISA and 
Code requirements applicable to the plan, including providing any 
disclosures or other information that the Secretary of Labor may 
require or which the pooled plan provider otherwise determines are 
necessary to administer the plan or to allow the plan to meet such 
ERISA and Code requirements; and
     provide that any disclosure or other information required 
to be provided to participating employers may be provided in electronic 
form and will be designed to ensure only reasonable costs are imposed 
on pooled plan providers and employers in the plan.
    The fidelity bonding requirements in ERISA section 412 apply to 
fiduciaries and other persons handling the assets of a pooled employer 
plan, but the maximum bond amount for each such plan official is 
$1,000,000, as compared to the $500,000 maximum that applies in the 
case of other ERISA-covered plans that do not hold employer 
securities.\5\
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    \5\ The SECURE Act requires that pooled plan providers must 
ensure that all plan fiduciaries and other persons who handle plan 
assets are bonded in accordance with section 412 of ERISA. In the 
Department's view, the SECURE Act confirms the application of ERISA 
section 412 requirements to pooled employer plans, except that the 
Act establishes $1,000,000 as the maximum bond amount as compared to 
$500,000 for plans that do not hold employer securities. Thus, the 
normal section 412 rules for ERISA plans govern the bonding 
requirements for pooled employer plans and the pooled plan provider 
is subject to the provisions of ERISA section 412(b), which provides 
that ``it shall be unlawful for any plan official of such plan or 
any other person having authority to direct the performance of such 
functions, to permit such functions, or any of them, to be performed 
by any plan official, with respect to whom the requirements of 
subsection (a) [of ERISA section 412] have not been met.'' See 29 
CFR 2550.412-1, 29 CFR part 2580; see also Field Assistance Bulletin 
2008-04 (providing a general description of statutory and regulatory 
requirements for bonding). The Department does not read the SECURE 
Act as broadening the section 412 bonding rules to apply to persons 
who handle plan assets regardless of whether they handled plan funds 
or other property within the meaning of section 412. Similarly, the 
existing statutory and regulatory exemptions for certain banks, 
insurance companies, and registered broker-dealers continue to 
apply.
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    A pooled plan provider with respect to a pooled employer plan is 
defined in ERISA section 3(44) to mean a person that--
     is designated by the terms of the plan as a named 
fiduciary under ERISA, as the plan administrator, and as the person 
responsible to perform all administrative duties (including conducting 
proper testing with respect to the plan and the employees of each 
employer in the plan) that are reasonably necessary to ensure that the 
plan meets the Code requirements for tax-favored treatment and the 
requirements of ERISA and to ensure that each employer in the plan 
takes such actions as the Secretary or the pooled plan provider 
determines necessary for the plan to meet Code and ERISA requirements, 
including providing to the pooled plan provider any disclosures or 
other information that the Secretary may require or that the pooled 
plan provider otherwise determines are necessary to administer the plan 
or to allow the plan to meet Code and ERISA requirements;
     acknowledges in writing its status as a named fiduciary 
under ERISA and as the plan administrator;
     is responsible for ensuring that all persons who handle 
plan assets or are plan fiduciaries are bonded in accordance with ERISA 
requirements; and
     registers as a pooled plan provider.
    The SECURE Act specifies that the Secretary may perform audits, 
examinations, and investigations of pooled plan providers as may be 
necessary to enforce and carry out the purposes of the provision. The 
SECURE Act also directs the Department to issue such guidance as it 
determines appropriate to carry out the pooled employer plan and pooled 
plan provider provisions, including guidance (1) to identify the 
administrative duties and other actions required to be performed by a 
pooled plan provider; and (2) that provides, in appropriate cases 
involving a noncompliant employer, for transfer of plan assets 
attributable to employees of the noncompliant employer (or 
beneficiaries of such employees) to (a) a plan maintained only by that 
employer (or its successor), (b) a tax-favored retirement plan for each 
individual whose account is transferred, or (c) any other arrangement 
that the Department determines is appropriate. The SECURE Act further 
provides such guidance must provide for the noncompliant employer (and 
not the plan with respect to which the failure occurred or any other 
employer in the plan) to be liable for any plan liabilities 
attributable to employees of the noncompliant employer (or 
beneficiaries of such employees), except to the extent provided in the 
guidance. An employer or pooled plan provider is not treated as failing 
to meet a requirement of guidance issued by the Secretary if, before 
the issuance of such guidance, the employer or pooled plan provider 
complies in good faith with a reasonable interpretation of the 
provisions to which the guidance relates.
    The SECURE Act also provides that the Form 5500 annual return/
report of employee benefit plan (Form 5500) filing for a multiple 
employer plan subject to section 210 of ERISA, including a pooled 
employer plan, must include a list of the employers in the plan, a good 
faith estimate of the percentage of total contributions made by such 
employers during the plan year, the aggregate account balances 
attributable to each employer in the plan (determined as the sum of the 
account balances of the employees of each employer and the 
beneficiaries of such employees) and, with respect to a pooled employer 
plan in particular, the identifying information for the person 
designated under the terms of the plan as the pooled plan provider. In 
addition, the provision authorizes the Department to prescribe 
simplified reporting for pooled employer plans that cover fewer than 
1,000 participants, but only if no single employer in the plan has 100 
or more participants covered by the plan.
    The SECURE Act does not limit the class of persons who can act as 
pooled plan providers, but it is expected that many financial services 
companies (such as insurance companies, banks, trust companies, 
consulting firms, record keepers, and third-party administrators) will 
be pooled plan providers. As noted above, however, section 3(44) does 
require as a condition of being a pooled plan provider that the person 
``registers as a pooled plan provider with the Secretary, and provides 
to the Secretary such other information the Department may require, 
before beginning operations as a pooled plan provider.'' \6\
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    \6\ ERISA section 3(44)(a)(ii).

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[[Page 72937]]

    In the Department's view, the primary statutory purpose of the 
registration requirement is to provide the Department with sufficient 
information about persons acting as pooled plan providers to engage in 
effective monitoring and oversight of this new type of ERISA-covered 
retirement plan. Although the Department does not have specific details 
as to how pooled employer plans authorized under the SECURE Act will be 
structured or operated, the Department has assumed that they may be 
similar to other currently operating multiple employer plans, and the 
Department did not receive any comments suggesting a contrary view. 
Additionally, there may be challenges associated with these new types 
of multiple employer plans that the Department, the Treasury 
Department, or the Internal Revenue Service (IRS), as the Federal 
agencies charged with oversight of private-sector pension plans, may 
need to address. The SECURE Act expressly provides that participating 
employers will retain certain residual fiduciary responsibilities, 
including responsibilities with respect to the selection and oversight 
of the pooled plan provider and the plan's other named fiduciaries. 
This raises concerns that there may be greater potential for inadequate 
employer oversight of the activities of a pooled employer plan, its 
fiduciaries, and service providers than is true of more traditional 
employer-sponsored plans because participating employers pass along 
more responsibility to the pooled plan provider than they do in other 
plan arrangements.
    The registration process and requirements must enable the 
Department to identify pooled plan providers when they begin operating 
and to effectively oversee the providers and plans. While pooled plan 
providers will be required to file Forms 5500 for the pooled employer 
plans they operate, Forms 5500 generally are not filed until seven to 
nine-and-a-half months after the end of the plan year.\7\ In the 
absence of appropriate detail in the registration statement, a pooled 
plan provider could begin operating multiple plans with hundreds or 
thousands of participants and millions of dollars without the agencies 
having any information about the pooled employer plans for almost two 
years.
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    \7\ Title I and Title IV of ERISA and the Code establish annual 
reporting requirements for employee benefit plans. DOL, the Treasury 
Department (specifically the IRS), and the Pension Benefit Guaranty 
Corporation jointly developed the Form 5500 so employee benefit 
plans could use one form to satisfy annual reporting requirements 
under ERISA and the Code. The Form 5500 is part of ERISA's overall 
reporting and disclosure framework, helping to assure that employee 
benefit plans are operated and managed in accordance with certain 
prescribed standards and that participants and beneficiaries, as 
well as regulators, are provided or have access to sufficient 
information to protect the rights and benefits of plan participants 
and beneficiaries.
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    In determining how best to implement the statutory registration 
requirement, the Department considered a number of alternatives 
including whether the statement must be filed when the provider begins 
operations in anticipation of offering one or more pooled employer 
plans, when it begins operating each individual pooled employer plan, 
or both. The Department also does not believe that the SECURE Act 
provisions preclude the Department from imposing reasonable ongoing 
reporting requirements to enable the Department to effectively oversee 
pooled plan providers and the pooled employer plans they operate. 
Therefore, as discussed in more detail below, relying on the language 
in the SECURE Act requiring a registration statement, as well as on its 
broad authority under section 505 of ERISA to prescribe regulations,\8\ 
including forms, to enable the Department to carry out its statutory 
oversight mission, the Department has chosen the structure set out in 
the final rule, which adopts the structure essentially as proposed.
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    \8\ Section 505 of ERISA provides generally that the Secretary 
may prescribe such regulations the Secretary ``finds necessary or 
appropriate to carry out the provisions of this subchapter. Among 
other things, such regulations may define accounting, technical and 
trade terms used in such provisions; may prescribe forms; and may 
provide for the keeping of books and records, and for the inspection 
of such books and records (subject to section 1134(a) and (b) of 
this title).'' 29 U.S.C. 1135.
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    The final rule requires an initial registration filing and 
supplemental filings. 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. These filings (initial and 
supplemental) capture information that is important for the Department, 
the Treasury Department, and the IRS to carry out oversight and for 
participating employers to exercise their fiduciary duties of selection 
and monitoring. The final rule also requires a final filing once the 
last pooled employer plan offered by a pooled plan provider has been 
terminated and has ceased operations.
    The Department believes that the initial registration, supplemental 
filing, and final filing requirements, when combined with the Form 5500 
annual reporting requirements, will give the Department the timely 
access to pooled plan provider information needed to fulfill the 
monitoring and oversight tasks the SECURE Act placed on the agencies 
and will be less burdensome and less costly for pooled plan providers 
and pooled employer plans than some of the alternatives considered. The 
final rule establishes a new EBSA form--EBSA Form PR (Pooled Plan 
Provider Registration) (Form PR)--as the required filing format for 
pooled plan provider registrations. Filing the Form PR satisfies the 
requirements under Title I of ERISA and the Code to register with the 
Department and the Treasury Department, respectively.
    This final rule is a deregulatory action under Executive Order 
(E.O.) 13771. Details on the estimated costs of this final rule can be 
found in the regulatory impact analysis, set forth later in this 
preamble. Pursuant to the Congressional Review Act (5 U.S.C. 801 et 
seq.), the Office of Information and Regulatory Affairs designated this 
rule as not a ``major rule,'' as defined by 5 U.S.C. 804(2).
    On September 1, 2020, the Department published in the Federal 
Register a proposed rule and proposed EBSA Form PR. The Department 
invited interested persons to submit comments on these items and, in 
response to this invitation, the Department received 20 written 
comments from a variety of parties, including plan sponsors and 
fiduciaries, plan service and investment providers, and employee 
benefit plan and participant representatives. These comments are 
available for review on the ``Public Comments'' page of the 
Department's Employee Benefits Security Administration website under 
the ``Laws and Regulations'' tab. Below is a detailed discussion of the 
provisions of the final rule, the public comments the Department 
received, and how these comments affected the Department's decision-
making when adopting the final rule.

II. Registration Requirements for Pooled Plan Providers

    The SECURE Act expressly requires, as a condition of being a pooled 
plan provider, that the provider register with the Department and 
provide other information that the Secretary may require. The SECURE 
Act, however, did not include specific content requirements for pooled 
plan provider registration. Under the final rule, the requirement to 
register and provide information to the Department is triggered by 
specific events. The rule's requirements can be divided into three sets 
of filing obligations corresponding

[[Page 72938]]

to the timing of specific events. First, there is an initial 
registration filing of basic identifying information about the pooled 
plan provider and additional information about pending legal or 
administrative proceedings. Second, there is a supplemental filing or 
filings requirement. A supplemental filing is required if there is a 
change in the information that was reported in the initial registration 
or if there is a significant new financial and/or operational event 
related to the pooled plan provider. A supplemental filing also is 
required when a pooled employer plan starts operations. The requirement 
for supplemental information is intended to provide the agencies, 
participating employers and employees, and the public information about 
noteworthy events occurring after the initial registration. Third, 
there is a final filing that is required once the last pooled employer 
plan has been terminated and ceased operations.

A. Initial Registration

Beginning Operations as a Pooled Plan Provider
    Paragraph (a) of the final regulations states that section 3(44) of 
ERISA sets forth the criteria that a person must meet in order to be a 
pooled plan provider for pooled employer plans under section 3(43) of 
ERISA. This introductory paragraph provides the context and scope for 
the registration requirement established in the remainder of the final 
rule. Commenters did not raise questions or concerns with paragraph (a) 
in the proposed rule. Therefore, the final rule adopts this provision 
as proposed.
    Section 3(44)(A)(ii) of ERISA contains the registration 
requirement. That section, in relevant part, defines a pooled plan 
provider as a person who ``registers as a pooled plan provider with the 
Secretary, and provides to the Secretary such other information as the 
Secretary may require, before beginning operations as a pooled plan 
provider.'' The statute does not define what is meant by ``beginning 
operations as a pooled plan provider.''
    Paragraph (b) of the proposed rule defined the central phrase 
``beginning operations as a pooled plan provider'' to mean ``publicly 
marketing services as a pooled plan provider or publicly offering a 
pooled employer plan.'' The preamble to the proposal clarified that 
this definition was not intended to require registration as a result of 
preliminary business activities, such as establishing the business 
organization, creating a business plan, obtaining necessary licenses or 
entering into contracts with subcontractors or partners, obtaining a 
Federal employer identification number from the IRS, or actions and 
communications designed to evaluate market demand in advance of 
publicly marketing pooled plan provider services or publicly offering 
one or more pooled employer plans.
    The proposed rule specifically solicited comments on this crucial 
definition in paragraph (b) by asking the following questions: Is the 
definition of ``beginning operations as a pooled plan provider,'' which 
determines whether initial registration is required, appropriate in 
scope? Should the definition exclude marketing and solicitation efforts 
so that the initial registration is tied solely to beginning operation 
of a pooled employer plan? Should the deadlines for filing an initial 
registration be nearer to the date of actual public marketing 
activities if the pooled plan provider intends only to engage in 
marketing and solicitation efforts, and will not enroll any employer or 
employee in a pooled employer plan until at least 30 days after initial 
registration?
    A number of commenters raised significant concerns with this 
proposed definition, particularly with its reliance on ``publicly 
marketing services as a pooled plan provider'' or ``publicly offering a 
pooled employer plan'' as the alternative acts that would decisively 
establish precisely when a person is considered to have begun 
``operations'' as a pooled plan provider. A more global objection was 
that registration should not turn on such early-stage and inchoate 
activities of firms with potential interest in eventually serving as a 
pooled plan provider. A more specific concern was based on the 
assertions that the two selected activities--marketing and offering--
were too vague.
    The consensus of these commenters was that more precision and 
clarity is needed when dealing with the establishment of a regulatory 
trigger for a governmental filing requirement, especially the ``public 
marketing'' trigger. These commenters uniformly agreed that firms need 
to evaluate market demand before deciding whether to offer a pooled 
employer plan, and that there is no clear distinction between commonly 
accepted methods for evaluating demand and the act of ``publicly 
marketing services'' within the plain meaning of these words in the 
proposal.
    A number of commenters stated that the line between 
``communications designed to evaluate market demand,'' which the 
Department explained in the preamble of the proposal would not be 
actions that would trigger the proposal's filing requirement, and 
``publicly marketing services as a pooled plan provider'' is not clear. 
Neither of these terms, according to these commenters, is clearly 
defined in the proposed rule or its preamble, and there is no safe 
harbor communication design or disclaimer described that could be used 
to ensure that a communication provided by a pooled plan provider to 
evaluate market demand does not also constitute public marketing 
material.
    To illustrate this ambiguity, commenters offered the following 
examples. An announcement at an industry conference of a firm's intent 
to enter the marketplace as a pooled plan provider, for example, could 
be construed as public marketing by some but not by others. In 
addition, a commenter suggested that a firm making references to 
developing pooled plan provider services or to establishing a pooled 
employer plan in personal biographies, company websites, or company 
handouts could be construed as public marketing by some but not by 
others. Similarly, communications to current clients about future 
intentions to offer a pooled employer plan could be construed as public 
marketing. Call center responses by employees, with or without 
marketing responsibilities in their job descriptions, could be 
construed as public marketing by some but not by others. In citing 
these examples, commenters stated that public marketing and 
communication is a necessary predicate for firms to gauge demand and 
decide whether it makes financial sense to offer or bring to market a 
particular product or service, and pooled employer plans are no 
different. Firms need to solicit interest publicly before determining 
whether to enter the marketplace, according to these commenters, and 
the proposal does not recognize that reality.
    Several commenters predicted certain potential negative effects of 
this proposed definition. One possible effect of the ambiguity of the 
proposal, according to comments, is that potential pooled plan 
providers would register before they have fully considered and designed 
a product or approach to bring to market. Another possible effect, 
according to comments, is that potential providers would avoid entering 
the marketplace altogether. A third possible effect of this ambiguity 
relates to firms that have already begun research and marketing efforts 
in anticipation of pooled employer plan business operations to commence 
on January 1, 2021. These firms, according to one commenter, will be in 
immediate violation of the registration requirement

[[Page 72939]]

upon the effective date of the final rule because research and 
marketing activity will have preceded registration, even if these firms 
register on the first possible date following publication.
    For these reasons, the commenters overwhelmingly favor a final rule 
that defines ``beginning operations as a pooled plan provider'' in a 
manner that ties the initial registration to some core operational 
facet of the pooled employer plan, rather than to the type of early-
stage marketing and soliciting activities in the proposal. Some 
commenters suggested that registration could be required in advance 
(e.g., 30 days) of a specific and objectively determinable act 
customarily associated with the start of a retirement plan. Commenters 
offered the following examples: The date of plan establishment; the 
date of enrollment of the first participating employer and its 
employees; the first date of actual plan operation; the date of the 
first participating employer's formal adoption of a participation or 
similar agreement; the date of the pooled plan provider's first 
appointment as such by an adopting employer under a pooled employer 
plan; and the date when the first dollar is obligated to be held in 
trust.
    Alternatively, other commenters suggested a less objective 
approach. In particular, they suggested tying the registration to 
whenever the pooled employer plan is considered covered under ERISA, 
e.g., 30 days in advance of that point. This suggestion is based on a 
different provision in the proposal, at paragraphs (b)(2) and (b)(6) 
(relating to a supplemental report containing the name and EIN for the 
pooled employer plan, and the name, address, and EIN for the trustee of 
the plan), which relies on the same longstanding facts-and-
circumstances coverage principles that have governed plans under ERISA 
for decades. In an attempt to bring some certainty to this highly 
facts-and-circumstances-dependent approach, one commenter suggested 
that the final rule could clarify, perhaps by example, that this 
standard would be considered satisfied if registration occurred at some 
designated period (e.g., 30 days) before ``the date the first pooled 
employer plan offered by the pooled plan provider is positioned to 
enter into participation arrangements with employers.''
    Regardless of the approach taken to define this concept, these 
commenters uniformly agreed that there is no need to prevent providers 
from marketing to potential employer members during the period between 
registration and plan operations. Any such prohibition would be 
counterproductive or even harmful to potential participating employers, 
according to these commenters. Providers must be able to market their 
pooled employer plan and pooled plan provider services as early as 
practicable so that prospective participating employers can assess 
their options, according to these commenters.
    In response to these commenters, paragraph (b) of the final rule 
adopts operation of a pooled employer plan as the event requiring prior 
registration rather than ``marketing'' or ``offering services'' as a 
pooled plan provider. Specifically, paragraph (b) of the final rule 
provides that, for purposes of implementing the statutory phrase 
``beginning operations as a pooled plan provider,'' the final rule 
defines that phrase to mean when the pooled plan provider begins 
``initiation of operations of the first plan that the person operates 
as a pooled employer plan.'' This term must be read in conjunction with 
paragraph (b)(6) of the final rule, which states, in response to the 
many commenters looking for a brighter-line test, that a pooled 
employer plan is treated as initiating operations as a pooled employer 
plan when the first participating employer executes or adopts a 
participation, subscription, or similar agreement for the plan 
specifying that it is a pooled employer plan or, if earlier, when the 
trustee of the plan first holds any asset in trust. A benefit of this 
approach is that it encompasses the traditional activities of pension 
plan formation and is intended to provide would-be pooled plan 
providers with maximum flexibility.
    The Department agrees with the commenters that this approach will 
simplify the registration process. Preliminary business activities of a 
would-be pooled plan provider, such as establishing the business 
organization, creating a business plan, obtaining necessary licenses, 
entering into contracts with subcontractors or partners, obtaining a 
Federal employer identification number from the IRS, or actions and 
communications designed to evaluate market demand, including marketing 
activity, do not trigger the registration requirement. This approach 
also continues to advance and support the Department's oversight 
functions, as the proposal sought to do. From the outset, an important 
purpose of the registration requirement is to provide the Department, 
the Treasury Department, the IRS, and importantly, prospective employer 
customers and the public, with notice and relevant information about 
the pooled plan provider. The Department has determined that this 
purpose is served equally as well by the final rule's focus on plan 
operations, as compared to the proposal's focus on marketing and 
offering of services.
Timing of Initial Registration--Changes to the Proposal's 90/30 Rule
    Paragraph (b)(1) of the proposal established a registration window 
by providing, in relevant part, that a person intending to act as a 
pooled plan provider must file the Form PR with the Department ``[n]o 
earlier than 90 days and no later than 30 days before beginning 
operations as a pooled plan provider[.]'' Many commenters questioned 
the necessity of the complex aspects of the proposal, including this 
provision. One commenter, in particular, stated that it is not clear 
what value this narrow time period (60 days) would provide to the 
Department in its oversight role. This commenter instead suggested 
expanding the 90-day period to 180 days before beginning operations. A 
longer window, according to this commenter, would give providers more 
leeway in getting a plan up and running after registration, as there 
could be unforeseen circumstances that delay the official establishment 
date of a plan.
    The Department agrees with the commenters that this aspect of the 
proposal could be streamlined without compromising important 
safeguards. The principal purpose of the 90-day restriction in the 
proposal was to ensure the information filed with the Department is 
relatively accurate and current so that Federal oversight agencies and 
employers are able to effectively discharge their oversight and 
monitoring obligations. Consistent with the arguments of these 
commenters, the Department has concluded this purpose is adequately 
supported by the final rule's requirement, in paragraph (b)(3)(i) of 
the final rule, that a pooled plan provider submit a timely 
supplemental filing when there is a change in the information that was 
reported in an initial filing. Accordingly, paragraph (b)(1) of final 
rule is changed from the proposal and does not include the ``no earlier 
than 90 days'' clause, but instead requires the filing of an initial 
registration ``at least 30 days before the initiation of operations of 
a plan as a pooled employer plan.''
Special Transition Provision--Delayed Application of the 30-Day Rule
    Paragraph (b)(1) of the final rule requires an initial registration 
at least 30 days before the initiation of operations of a plan as a 
pooled employer plan. Some commenters on the proposal stated that a 
significant number of firms already have committed substantial 
resources toward, and intend to initiate, operations of pooled employer 
plans on

[[Page 72940]]

January 1, 2021, or as soon as possible thereafter. These commenters 
are concerned that they will be compelled to delay the initiation of 
operations of pooled employer plans solely because of the Department's 
timeline for publishing a final rule. To address these concerns, 
paragraph (c) of the final rule contains a special provision that 
allows an initial registration to be filed anytime 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. The provision 
applies with respect 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. Paragraph (c) of the final rule has 
no effect after that date. Some commenters requested a much longer 
period, e.g., a period of 180 days following publication of a final 
rule. Requests of this magnitude, however, appear to have been 
predicated, at least in part, on the proposal's reliance on ``publicly 
marketing services'' as the trigger for the registration requirement, 
which has been eliminated.
Content Requirements
    The SECURE Act left it to the agencies' discretion to establish 
specific content requirements for the pooled plan provider 
registration. In developing this proposal, the Department focused on 
information needed by the agencies to identify, contact, and engage in 
timely oversight of pooled plan providers, as well as on the 
information that the Department could post on its website that would 
provide employers considering participating in a pooled employer plan, 
participating employees, covered employees, and other interested 
stakeholders the ability to identify, contact, and perform some due 
diligence on pooled plan providers. The Department also considered the 
content requirements of other registration requirements under Federal 
and State securities laws for investment advisers and broker-dealers. 
For example, among other information, registrations require disclosures 
of identifying and contact information, background information about 
the registrant's business, information about relevant management 
policies, names of executives and general partners, relevant legal 
proceedings and previous violations, and relevant negative information, 
such as legal problems or other business events or trouble that would 
be of consequence to users of the registration information. The 
Department also focused on minimizing the administrative burden and 
expense involved for pooled plan providers and the pooled employer 
plans they operate.
    Based on those considerations, and as a result of applicable 
comments more fully described below, paragraph (b)(1) sets out the 
specific information a prospective pooled plan provider would need to 
file on Form PR at least 30 days before beginning operations as a 
pooled plan provider:
    1. Legal Business Name and any Trade Name (Doing Business As). 
Commenters did not raise questions or concerns with this requirement; 
therefore, the final rule adopts this provision as proposed.
    2. Federal Employer Identification Number (EIN). An EIN is a nine-
digit employer identification number (for example, 00-1234567) that has 
been assigned by the IRS. Entities that do not have an EIN may apply 
for one on Form SS-4, Application for Employer Identification Number. 
The Form SS-4 is available by calling 1-800-829-4933 or on the IRS 
website at https://www.irs.gov/pub/irs-pdf/fss4.pdf. EIN data is 
important for accurately identifying registrants and cross-referencing 
information reported about the registrant on other filings, such as the 
Form 5500 filed by the pooled employer plans operated by the 
registrant. Commenters did not raise questions or concerns with this 
requirement. Therefore, the final rule adopts this provision as 
proposed.
    3. Business Telephone. Paragraph (b)(1)(ii) of the final rule 
requires a business telephone number as a way for interested/
participating employers and covered employees to contact the pooled 
plan provider for information. Some commenters, responding to questions 
in the preamble of the proposal, requested confirmation that this final 
regulation does not preclude a pooled plan provider from permitting a 
call center number to be reported as the business phone. The view of 
these commenters is that registrants should be able to determine the 
most appropriate contact information to provide on the registration. 
Other commenters suggested a better business practice for pooled 
employer plans may be to have one telephone number for potential 
participating employers and a different telephone for participating 
employers and participants, as the nature of the callers' questions and 
needs could be quite different. This paragraph of the final rule 
requires the phone number of the pooled plan provider; it does not 
prescribe or proscribe anything beyond that. Registrants decide what 
business phone number to include in the registration for this purpose. 
Accordingly, the final rule adopts the provision as proposed.
    4. Business Mailing Address. Commenters did not request any 
revisions to this requirement, which is adopted as proposed.
    5. Address of any public website or websites of the pooled plan 
provider or any affiliates to be used to market any such person(s) as a 
pooled plan provider to the public or to provide public information on 
the pooled employer plan operated by the pooled plan provider. The 
preamble to the proposed rule explained that the Department considers 
this information useful for its oversight of pooled plan providers and 
will also assist employers performing due diligence in selecting and 
monitoring pooled employer plans. The preamble also stated that the 
Department expects that most pooled plan providers will have such 
websites and believes that having information on such websites provides 
an alternative to requiring more information to be submitted as part of 
the registration process. Commenters did not raise questions or 
concerns with or request any revisions to this requirement in the 
proposal. Therefore, the final rule adopts this provision as proposed.
    6. The name, mailing address, telephone number, and email address 
for the responsible compliance official of the pooled plan provider. 
Paragraph (b)(1)(v) of the proposal required the reporting of basic 
contact information about the pooled plan provider's ``primary 
compliance officer.'' The Department is aware that many companies of 
the type likely to be pooled plan providers have individuals or teams 
of compliance officers with varying responsibilities, and this 
provision of the proposal relied on that relatively uncontroversial 
fact. The intent behind this provision of the proposal was to capture 
and make available basic contact information of the person responsible 
for these individuals or compliance officers because, in the 
Department's view, it is important that the Department, as well as 
participating employers and covered employees, have an effective means 
of communicating with a responsible person at the pooled plan provider 
regarding compliance questions or concerns.
    Some commenters questioned the necessity of providing contact 
information for a ``primary compliance officer.'' To the extent the 
purpose of the requirement is to provide a contact for the Department's 
own use, they argued that the Department as a Federal

[[Page 72941]]

regulatory authority independently has the capacity to identify and 
contact a compliance officer without regard to this regulation. To the 
extent the requirement is designed to provide employers and employees 
with contact information for a person that is able to answer questions 
about their pooled employer plan, the commenters believed that the 
primary compliance officer would not be helpful. They suggested that 
the type of information employers and employees were likely to seek, or 
that they should seek, is more appropriately provided by the plan 
administrator, and noted that contact information for the plan 
administrator could be found in the summary plan description, or 
answered by the general business number required by paragraph 
(b)(1)(ii) of the proposal. These commenters accordingly suggested 
eliminating this aspect of the proposal.
    The Department declines to adopt this global suggestion. The 
Department continues to believe that employers, participants, and 
oversight agencies will have legitimate questions specifically 
regarding the pooled employer plans' compliance with applicable 
provisions under ERISA and the Code that cannot be answered by 
contacting, for example, the general number of the pooled plan 
provider, a salesperson, or an entry-level clerk. Pooled plan providers 
and pooled employer plans are new types of entities under the law, and 
it is reasonable to expect that affected individuals will have genuine 
compliance-oriented questions that may not have ready answers. 
Moreover, even in its own experience, the Department sometimes 
encounters friction when attempting to communicate with responsible 
compliance officials, especially at large companies with numerous 
touchpoints. The Department, therefore, retains a version of this 
requirement in the final rule, but is modifying it to address public 
comments.
    Some commenters stated that the term ``primary compliance officer'' 
is imprecise and possibly confusing. According to commenters, some 
companies that might be pooled plan providers do not have compliance 
officers at all, while other firms have many compliance officers none 
of whom are necessarily ``primary.'' For the former group, commenters 
stated that presumably the Department is not requiring that a pooled 
plan provider hire a primary compliance officer solely for this 
registration regulation, and, as regards the latter group, the 
commenters stated that the proposal was unclear as to what laws or 
regulations the identified person had to be responsible for as primary 
compliance officer. Finally, some commenters objected to having to 
identify a specific individual by name, as a contact, asserting that 
this could raise privacy or similar concerns and necessitate 
supplemental filings, as required by paragraph (b)(3)(i) of the 
regulation, with every change in compliance officer. In response to 
these comments, the Department has made adjustments to the proposal.
    Paragraph (b)(1)(v) of this final rule requires the ``[n]ame, 
address, contact telephone number and email address for the responsible 
compliance official of the pooled plan provider.'' For this purpose, 
the term responsible compliance official means ``the person or persons, 
identified by name, title, or office, responsible for addressing 
questions regarding the pooled plan provider's status under, or 
compliance with, applicable provisions of the Employee Retirement 
Income Security Act and the Internal Revenue Code as pertaining to a 
pooled employer plan.'' As revised, this does not require a pooled plan 
provider to hire or promote an individual with any particular degree or 
certification. Rather, this standard simply requires an identification 
of, and basic contact information for, the person, unit, or element 
designated by the pooled plan provider as the point-person responsible 
for fielding and addressing questions about the pooled plan provider's 
status under ERISA and the Code. Put differently, this provision 
requires nothing more than that the company identify with modest 
specificity whom it wishes to receive and address status and 
compliance-oriented questions under the two laws (ERISA and the Code) 
that sanction the existence of this novel type of plan, and how to 
contact this person, office, or other element of the pooled plan 
provider.
    7. The agent for service of legal process for the pooled plan 
provider and the address at which process may be served on such agent. 
The proposal rule explained that this provision would allow either a 
person or a process service company to be identified as the agent for 
service of legal process. Commenters did not raise any material 
questions or concerns with this requirement, therefore, the final rule 
adopts this provision substantially as proposed. However, in response 
to observations that the rule implements a registration requirement and 
does not otherwise implement substantive mandates, the final rule 
removes from the proposal the phrase ``and in addition a statement that 
service of legal process may be made upon the pooled plan provider.'' 
This removal clarifies that paragraph (b)(1)(vi) of the final rule does 
not confer or affect rights or obligations of parties.
    8. The approximate date when pooled plan operations are expected to 
commence. Because the SECURE Act requires that the registration must be 
filed ``before the pooled plan provider begins operations,'' this data 
element will enable the Department to ensure compliance with the SECURE 
Act requirement. Paragraph (b)(1) of the final regulation requires that 
the registration be filed at least 30 days before beginning operations 
as a pooled plan provider, except where a provider falls within the 
initial 30-day transition period. Commenters did not raise questions or 
concerns about this provision or request any revisions to its text. 
Therefore, the final rule adopts this provision as proposed.
    9. A description of the administrative, investment, and fiduciary 
services that will be offered or provided in connection with the pooled 
employer plans, including a description of the role of any affiliates 
in such services. Paragraph (b)(1)(viii) of the proposal requires the 
registrant to include in the initial filing a ``description of the 
administrative, investment, and fiduciary services that will be offered 
or provided in connection with the pooled employer plans, including a 
description of the role of any affiliates in such services.'' The 
preamble to the proposal explained that information about various plan 
services to be provided by the pooled plan provider or any affiliate 
will assist the Department and prospective participating employers in 
evaluating the pooled plan provider and identifying potential conflicts 
of interest with respect to the operations or investments of any pooled 
employer plans to be operated by the provider.
    Commenters raised multiple concerns with this provision. A few 
commenters argued that this provision (in conjunction with other 
provisions) is inconsistent with a simple registration requirement and 
should be eliminated from the final rule. These commenters argue 
broadly that the success of this new retirement vehicle (i.e., the 
pooled employer plan) will be jeopardized by excessive and unnecessary 
regulations. These commenters generally advocated for fewer regulatory 
obstacles to starting up pooled employer plans, but with careful 
monitoring and possible adjustments over time.
    Other commenters asserted that the Department's expectations for 
paragraph (b)(1)(viii) of the proposal are unclear because of tensions 
between the text of the regulation, on the one hand, and the proposed 
Form PR and related

[[Page 72942]]

instructions, on the other. The commenters noted that the proposed 
regulatory text requires a ``description'' of the services that will be 
offered or provided by a pooled plan provider or affiliate, as well as 
a ``description of the role'' of any affiliates in such services. By 
contrast, the proposed Form PR and related instructions require only 
that certain boxes be checked to indicate whether certain services will 
be offered or provided by the pooled plan provider or an affiliate (no 
description at all), according to these commenters. Assuming that the 
Department intends that the narrower requirements in the proposed Form 
PR (i.e., whether services will be provided, instead of a description 
of and the role of affiliates) would satisfy the operative text, the 
commenters additionally questioned whether such reporting offers the 
Department or employers any value or information not otherwise 
available already, such as through existing reporting obligations (Form 
5500, Schedule C) and disclosure regulations.
    Other commenters argued that the information required by paragraph 
(b)(1)(viii) of the proposal is unnecessary. This is because, according 
to these commenters, the SECURE Act, among other things, requires the 
pooled plan provider to serve as the ERISA 3(16) administrator and as a 
named fiduciary. As such, the pooled plan provider is ``the person 
responsible for the performance of all administrative duties (including 
conducting proper testing with respect to the plan and the employees of 
each employer in the plan).'' Accordingly, it should be evident, these 
commenters assert, that the pooled plan provider will provide 
administrative and fiduciary services. These commenters see no benefit 
to this proposed provision that would require the pooled plan provider 
to report such obvious information back to the government on the Form 
PR.
    Other commenters questioned whether this provision would result in 
the disclosure of information helpful to carry out the stated 
objectives of the Department (to assist in the evaluation of potential 
for conflicts of interest). These commenters stated their belief that 
many pooled plan providers will offer or sponsor multiple pooled 
employer plans. Further, these commenters stated that many pooled plan 
providers will offer multiple services, directly or through affiliates, 
to these plans. These commenters stated their belief that some pooled 
employer plans will use some services offered by the pooled plan 
provider (or affiliates), and other pooled employer plans will use a 
different combination of services offered by the pooled plan provider 
(or affiliates). In recognition that each pooled employer plan 
ultimately will select its own combination of services from the pooled 
plan provider (or affiliates), these commenters question whether the 
generic list of information required by paragraph (b)(1)(iii) of the 
proposal (as implemented through the proposed Form PR), which is not 
specific to any particular pooled employer plan, would meaningfully 
advance the stated objectives of the Department. These commenters 
suggested that potential participating employers need different 
information-information specific to their particular pooled employer 
plan-to evaluate potential conflicts, such as information more closely 
approximating the information covered service providers furnish to 
responsible plan fiduciaries under 29 CFR 2550.408b-2.
    The Department declines to eliminate this provision. The SECURE Act 
clearly imposes an oversight duty on the Department with respect to 
pooled employer plans. A chief concern of the Department is potential 
conflicts of interest. Pooled plan providers are in a unique statutory 
position in that they are granted full discretion and authority to 
establish the plan and all of its features, administer the plan, and to 
act as a fiduciary, hire service providers, and select investments and 
investment managers. Further, at this point in time, business models 
for these plans are still being developed.\9\ In light of all of this, 
the Department does not agree that a question that requires a pooled 
plan provider to identify whether it or any of its affiliates will 
provide services to a pooled employer plan is unreasonable or excessive 
in scope. In response to specific commenters' concerns about the 
vagueness of the proposal's requirement to explain the role of 
affiliates in connection with providing services, the final rule has 
been simplified to require merely an identification, by name and EIN, 
of any affiliate that is expected to provide services to the pooled 
employer plan. This will allow the Department to follow up as 
necessary.
---------------------------------------------------------------------------

    \9\ 85 FR 36880 (June 18, 2020) (titled Prohibited Transactions 
Involving Pooled Employer Plans Under the SECURE Act and Other 
Multiple Employer Plans).
---------------------------------------------------------------------------

    10. A statement disclosing any ongoing Federal or State criminal 
proceeding, or any Federal or State criminal convictions, related to 
the provisions of services to, operation of, or investments of, any 
employee benefit plan against the pooled plan provider, or any officer, 
director, or employee of a pooled plan provider, provided that 
disclosure of any criminal conviction may be omitted if the conviction, 
or related term of imprisonment served, is outside ten years of the 
date of the registration. This provision in paragraph (b)(1)(ix) of the 
final rule was adopted from the proposed regulation with only one non-
substantive change. A few commenters argued that this provision need 
not focus on individual employees of the pooled plan provider for 
reasons of privacy, as well as for reasons of scope and burden. In 
terms of privacy, this provision encompasses only information (e.g., 
caption, docket number, State) that is already in the public record. 
For instance, if the entire case is under seal and there is no docket 
or caption, the filer would not need to disclose the existence of any 
such sealed case. In terms of scope, a commenter objected to the notion 
that a pooled plan provider would have to report criminal conviction 
information about ``any employee''--including rank-and-file employees, 
such as janitors or maintenance staff, whose positions make it unlikely 
that they could threaten the safety of a pooled employer plan. These 
commenters also noted that the firms likely to be pooled plan providers 
have thousands of employees. Like the proposal, however, the final rule 
does not reach as broadly as some commenters suggest. This provision 
reaches only those rank-and-file employees of the pooled plan provider 
whose conviction relates to providing services to, the operation of, or 
investments of, an employee benefit plan, and whose conviction or 
imprisonment is within the last ten years. The final rule retains this 
provision because it focuses on relevant negative information that will 
be useful in the Department's oversight of pooled plan providers. Other 
statutory provisions in ERISA already evidence the relevance of this 
type of activity and inform the scope of paragraph (b)(1)(ix) of the 
final rule. For example, under ERISA section 411, the Department is 
responsible for ensuring that disqualified parties do not serve in 
positions or capacities prohibited under the statute.\10\ Although 
paragraph

[[Page 72943]]

(b)(1)(ix) of the final rule is intentionally constructed without all 
the technical nuance and specifications in section 411 of ERISA, that 
statutory provision prohibits individuals convicted of disqualifying 
crimes from serving in plan-related capacities during or for a period 
of 13 years after such conviction or the end of imprisonment, whichever 
is later, subject to provisions allowing that period to be 
shortened.\11\
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    \10\ Section 411 of ERISA provides ``[n]o person who has been 
convicted of, or has been imprisoned as a result of his conviction 
of, robbery, bribery, extortion, embezzlement, fraud, grand larceny, 
burglary, arson, a felony violation of Federal or State law 
involving substances defined in section 802(6) of title 21, murder, 
rape, kidnaping, perjury, assault with intent to kill, . . . any 
felony involving abuse or misuse of such person's position or 
employment in a labor organization or employee benefit plan to seek 
or obtain an illegal gain at the expense of the members of the labor 
organization or the beneficiaries of the employee benefit plan . . . 
shall serve or be permitted to serve . . . (1) as an administrator, 
fiduciary, officer, trustee, custodian, counsel, agent, employee, or 
representative in any capacity of any employee benefit plan, (2) as 
a consultant or adviser to an employee benefit plan, including but 
not limited to any entity whose activities are in whole or 
substantial part devoted to providing goods or services to any 
employee benefit plan, or (3) in any capacity that involves 
decision-making authority or custody or control of the moneys, 
funds, assets, or property of any employee benefit plan . . . .''
    \11\ See also Beck v. Levering, 947 F.2d 639 (2d Cir. 1991) (in 
a civil action, permitting lifetime injunction against an individual 
from providing services to ERISA plans).
---------------------------------------------------------------------------

    Finally, the proposal specifically solicited comments on whether 
civil judgments in private litigation should be added to this 
provision, and if so, the types. In the Department's view, criminal 
judgments are more likely, as a broad category, to be good indicators 
of the need for additional review or inquiry than are civil judgments 
in private litigation. None of the commenters unambiguously advocated 
including civil judgments of this type in this provision, accordingly, 
the Department declines to expand this provision in this manner. A non-
substantive change was made to this provision. For organizational 
purposes, the words ``ongoing'' and ``proceedings'' were moved to this 
provision from paragraph (b)(1)(x) of the proposal to accommodate 
changes made to that provision.
    11. A statement disclosing any ongoing civil or administrative 
proceedings in any court or administrative tribunal by the Federal or 
State government or other regulatory authority against the pooled plan 
provider, or any officer, or director, or employee of the pooled plan 
provider, involving a claim or fraud or dishonesty with respect to any 
employee benefit plan, or involving the mismanagement of plan assets. 
Paragraph (b)(1)(x) of the proposal required the initial filing to 
include a statement disclosing any ongoing criminal, civil, or 
administrative proceedings related to the provisions of services to, 
operation of, or investments of any employee benefit plan, in any court 
or administrative tribunal by the Federal or State government or other 
regulatory authority against the pooled plan provider or any officer, 
director, or employee of the pooled plan provider.\12\ Similar to the 
information on criminal convictions, this data element focuses on 
information that may be useful in the Department's oversight of pooled 
plan providers and that may also assist employers performing due 
diligence in selecting and monitoring pooled employer plans.
---------------------------------------------------------------------------

    \12\ Other regulatory authority includes self-regulatory 
organizations authorized by law, such as the Financial Industry 
Regulatory Authority (FINRA). However, as used in the final rule, 
other regulatory authority does not include any foreign regulatory 
authorities.
---------------------------------------------------------------------------

    Regarding ongoing administrative proceedings (as opposed to 
criminal and civil proceedings), a number of commenters were concerned 
that the clause ``any ongoing administrative proceeding'' could be read 
to include routine audits, investigations, or informal inquiries by 
Federal and State regulators. These commenters stated that most pooled 
plan providers likely will be financial service organizations that are 
routinely subject to investigations, audits, and other administrative 
actions by any number of Federal and State agencies and that requiring 
these providers to report such actions would be burdensome and 
potentially misleading as to the ``risks'' of working with a specific 
provider. These commenters suggested limiting the scope of the types of 
administrative proceedings falling into this category in a manner that 
does not include routine administrative activities carried out by 
executive agencies as part of their routine oversight functions and 
responsibilities.
    In response to these commenters, the Department agrees that the 
public would benefit from a more precise definition of ``administrative 
proceeding'' that does not include routine regulatory oversight 
activities of the type suggested by some commenters and that the scope 
of this provision could be narrowed without compromising the 
Department's objectives. Paragraph (b)(1)(x) of the final rule, 
therefore, is limited to formal administrative hearings. This 
limitation was accomplished by adding a definition of ``administrative 
proceeding'' in paragraph (b)(8) of the final rule. This definition is 
grounded in established procedures for administrative hearings by the 
Department.\13\ Paragraph (b)(8) defines this term to mean ``a 
judicial-type proceeding of public record before an administrative law 
judge or similar decision-maker.'' The key elements of this definition 
ensure a level of formality and process that operate to exclude the 
types of routine administrative proceedings mentioned by the 
commenters, such as routine audits, examinations, and benefits reviews 
by executive-branch agencies. In sum, the definition elevates the level 
of administrative proceeding above the numerous array of preliminary 
administrative and oversight activities mentioned by the commenters, to 
proceedings that involve disputes that are ripe for adjudication and 
matters that are of public record.
---------------------------------------------------------------------------

    \13\ See, e.g., 29 CFR 2571.2 (Procedures for Administrative 
Hearings on the Issuance of Cease and Desist Orders Under ERISA 
Section 521--Multiple Employer Welfare Arrangements).
---------------------------------------------------------------------------

    Additionally, regarding all three types of proceedings covered by 
paragraph (b)(1)(x) of the proposal (criminal, civil, and 
administrative), many commenters raised concerns regarding the general 
breadth of activities covered by this provision of the proposal. They 
requested a more substantial limitation on the type of activities 
covered by the subject proceedings than merely any act ``related to'' 
the ``operation of'' or ``investments of'' any employee benefit plan to 
which the pooled plan provider has a commercial (service or 
investments) relationship. Additionally, the commenters were concerned 
with the proposal's extension of this provision to ``any . . . 
employee'' of the pooled plan provider. Many pooled plan providers will 
likely be large firms and may have thousands-even tens of thousands-of 
employees, according to the commenters. The commenters maintained that 
the cumulative effect of these open-ended or undefined concepts will 
result in an expensive, impracticable, or unworkable registration.
    In response to these commenters, the final rule makes another 
narrowing change to the proposal. The Department has determined that, 
without this additional change, this aspect of the final rule may be 
impractical for large providers and could result in so much reporting 
that the registration requirement would become less useful. 
Accordingly, paragraph (b)(1)(x) of the final rule limits the type of 
reportable event to matters involving claims of fraud or dishonesty 
with respect to any employee benefit plan, or involving the 
mismanagement of plan assets. These matters go to the core of the 
Department's oversight responsibilities and, similarly, should be of 
utmost relevance to potential or participating employers. These changes 
will reduce the reporting burden on pooled plan providers, while 
improving the quality of the information on file by encompassing only 
the most egregious

[[Page 72944]]

claims. Commenters' concerns regarding the coverage of rank-and-file 
employees are not without merit. Limiting the scope of actions as 
described in this paragraph addresses this concern.\14\
---------------------------------------------------------------------------

    \14\ The preamble to the proposal provided that, for purposes of 
registration, employees of the pooled plan provider would include 
employees of the pooled employer plan, but only those who handle 
assets of the plan within the meaning of section 412 of ERISA or who 
are responsible for the operations or investments of the plan. 85 FR 
54288. The intent of this provision is to avoid potential oversight 
gaps by treating certain employees of the pooled employer plan, if 
any, as if they are employees of the pooled plan provider in order 
to subject them to the disclosure requirements of the regulation. 
The provision identifies a subset of employees of the pooled 
employer plan who are in important positions of plan operations or 
handle plan assets. Commenters did not raise questions or concerns 
about this provision. Therefore, the final rule adopts this 
provision as proposed. In response to one comment, however, this 
provision was relocated from the preamble to paragraph (b)(10) of 
the final rule for complete transparency.
---------------------------------------------------------------------------

    Finally, the proposal specifically requested comments on the 
feasibility and advisability of expanding this provision in the final 
rule to include settlements of fiduciary liability claims against 
pooled plan providers with the Department or the Pension Benefit 
Guaranty Corporation, including settlements under ERISA Sec.  
206(d)(4)(A)(iii). Commenters were asked whether such information would 
be helpful to employers performing due diligence in selecting and 
monitoring pooled employer plans. The commenters who responded to this 
specific request uniformly rejected such an expansion. They reasoned 
that most lawsuits are settled without admission of fault and 
disclosure of such information, therefore, would not necessarily prove 
itself to be helpful or reliable to prospective or participating 
employers and may even have adverse or otherwise chilling effects on 
the establishment of pooled plan providers and pooled employer plans. 
Based on the public record, the Department declines to expand this 
provision in this manner.

B. Reportable Event Supplemental Filings

    The final rule provides for two types of supplemental filings. The 
first type focuses on the commencement of operations by a pooled plan 
provider of a pooled employer plan. The second type of supplemental 
filing deals more generally with changes in circumstances of the pooled 
plan provider that have occurred since the provider's initial filing. 
Both types of supplemental filings will provide important information 
to the Department, the Treasury Department, and the IRS, to help them 
protect plan participants and beneficiaries and conduct more effective 
monitoring and oversight of pooled employer plans and pooled plan 
providers. Without this kind of timely information, the agencies would 
typically not learn of risks to a pooled employer plan until the plan 
files a Form 5500, possibly many months after the event (assuming the 
information was even required to be reported on the Form 5500), and 
when opportunities for protecting plan participants from financial 
injury have been missed. Reporting changes in the previously filed 
registration information also will help the Department ensure that the 
information regarding pooled plan providers posted on its website and 
available to the public is up to date. Otherwise the Department, 
employers, and the public would have to rely on outdated information 
until a Form 5500 was filed for the plan and then would need to compare 
the registration information with the subsequently filed information 
about pooled plan providers in Forms 5500 submitted by the pooled plan 
provider on behalf of the pooled employer plans the providers operate. 
The need to rely upon, compare, and resolve differences between 
registration statements and Forms 5500 would dramatically reduce the 
value of registration filings as a ready and reliable data source for 
the Department, employers, and the public.
Commencement of a Pooled Employer Plan--Paragraph (b)(2)
    Paragraph (b)(2) of the final rule requires a pooled plan provider 
to file a supplemental report before beginning to operate a pooled 
employer plan. The supplemental filing must contain the name and plan 
number (PN) that the pooled employer plan will use for annual 
reporting, and the name, address, and EIN for the trustee for the 
plan.\15\ Under paragraph (b)(2), this supplemental information must be 
filed ``[n]o later than the initiation of operations of a plan as a 
pooled employer plan.'' Sometimes, however, a pooled plan provider will 
know this information at the time it submits its initial filing. If so, 
paragraph (b)(2) is satisfied if the pooled plan provider includes this 
information with the initial filing. This supplemental information must 
be reported earlier than the other supplemental information required 
pursuant to paragraph (b)(3) of the final rule, which must be reported 
within the later of 30 days after the calendar quarter in which the 
reportable event occurred or 45 days after a reportable event. The 
earlier timing requirement in paragraph (b)(2) arises from Code section 
413(e)(3), which provides that the requirements to be a pooled plan 
provider (including the requirement to register with the Secretary of 
the Treasury before beginning operations as a pooled plan provider) 
must be satisfied ``with respect to any plan.''
---------------------------------------------------------------------------

    \15\ Subsequent filings on Form 5500 are publicly available 
through the Department's EFAST website, available at efast.dol.gov. 
Using the EFAST search function, an interested person may review any 
Form 5500 filings by a specific pooled employer plan by entering the 
plan's name and PN.
---------------------------------------------------------------------------

    One change was made to this provision from the proposed regulation. 
Whereas the proposal required the EIN for the pooled employer plan, 
paragraph (b)(2) of the final rule requires the PN that the pooled 
employer plan will use for annual reporting purposes. Paragraph 
(b)(1)(iii) of the final rule already requires disclosure of the EIN of 
the pooled plan provider. Thus, the combination EIN/PN for each pooled 
employer plan would be the pooled plan provider's nine-digit EIN and 
the three-digit PN that the pooled plan provider assigns to each pooled 
employer plan it operates. This change eliminates the burden on a 
pooled plan provider to obtain a separate EIN for each pooled employer 
plan it operates. Instead, the pooled plan provider simply uses its own 
EIN and self-assigns a PN for the particular pooled employer plan. This 
change also establishes a much stronger link between the Form PR and 
the pooled employer plan's Forms 5500 Annual Return/Report. One 
commenter requested the Department, among other things, to take active 
efforts to ensure that the pooled plan provider's Form PR and the 
pooled employer plan's annual reports will be appropriately cross-
linked. This change responds to this commenter's request.
Other Reportable Events--Paragraph (b)(3)(i) through (v)
    Paragraph (b)(3) of 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. This is a longer period than was 
permitted under the proposed regulation, which required a supplemental 
filing within 30 days of each such reportable event. This extension was 
based on commenters' concerns with the brevity of the timeframe in the 
proposal.
    In evaluating the 30-day deadline in the proposal, the commenters 
were concerned that they would need to establish a complex and costly 
tracking system to monitor for supplemental

[[Page 72945]]

reporting events, reducing the profit margins and incentives to offer 
pooled employer plans. The commenters argued that the number and scope 
of potential reportable events would effectively require daily tracking 
and reporting because every day necessarily is the end of a prior 30-
day period. The commenters suggested an annual updating requirement as 
an alternative.
    In response to these concerns, 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. The 
Department agrees with the commenters that the proposal's 30-day 
deadline could have potentially created unnecessary burden for some 
pooled plan providers. The Department, however, is unable to conclude 
that a single annual update for all reportable events that occurred in 
that year reliably provides the Department, other agencies, and 
participating employers with sufficiently timely information to 
discharge the obligations that underpin the establishment of this rule. 
Such an approach would reduce the reliability of registration 
information, which could be quite stale. For instance, an annual update 
of the sort recommended by the commenters would be well in excess of 
the 180 days creditors generally have to file against a debtor in 
matters of bankruptcy. Further, the final rule limits the scope of the 
supplemental reporting requirements in paragraph (b)(3)(iii) of the 
final rule, potentially obviating at least some of the concerns 
underpinning the length of commenters' request. On balance, the 
Department believes the ``quarterly'' rule in the final regulation 
strikes a fair balance between the proposal and the commenters' 
request. The Department recognizes that an occurrence triggering a 
supplemental filing could happen within days of the end of a quarter; 
the final rule thus provides that pooled plan providers at a minimum 
will have 45 days to submit a supplemental filing.
    Changes that trigger a supplemental filing under paragraph (b)(3) 
are as follows:
    1. Changes in information previously reported. Paragraph (b)(3)(i) 
of the final rule requires a supplemental filing in the case of a 
change in the registration information previously reported by the 
pooled plan provider. This provision in the final rule is the same as 
in the proposed rule with one non-substantive change. One commenter 
suggested that we limit the changes that require a supplemental filing 
under paragraph (b)(3)(i) to those that are ``material.'' The 
Department declines this suggestion because, in its view, all of the 
registration information required in an initial filing is material. The 
purpose of paragraph (b)(3)(i) of the final rule is to ensure that the 
registration information the Department has, and that it posts on its 
website, is accurate and up to date so that the Department and 
prospective and participating employers are able to perform their 
oversight and due diligence activities, respectively, and accurate and 
up-to-date information is essential to these functions. Moreover, in 
other parts of this final rule, we have circumscribed the information 
that is to be included in an initial filing and have also extended the 
timeframe for submitting the supplemental filing, both of which should 
ameliorate concerns that registrants potentially would be filing 
copious non-material information. The non-substantive change is to 
clarify that updated disclosure relating to criminal, civil, or 
administrative proceedings need not be made pursuant to paragraph 
(b)(3)(i) if such information is otherwise being disclosed pursuant to 
paragraphs (b)(3)(iii)-(v).
    2. Changes in corporate or business structure. Paragraph (b)(3)(ii) 
of the final rule requires a supplemental filing in the case of any 
significant change in corporate or business structure of the pooled 
plan provider, e.g., merger, acquisition, or initiation of bankruptcy, 
receivership, or other insolvency proceeding for the pooled plan 
provider or affiliate that provides services to any pooled employer 
plan, or ceasing all operations as a pooled plan provider. A 
significant change in corporate or business structure could have 
consequences that affect the pooled employer plans as well as 
participating employers and covered employees and could also give rise 
to possible conflicts of interest that would not have existed in the 
absence of the transaction.
    One clarification was made to this provision from the proposed 
regulation. The proposal would have required a supplemental filing in 
the case of an insolvency proceeding of an affiliate of a pooled plan 
provider regardless of whether the affiliate provides services to a 
pooled employer plan. Some commenters broadly questioned the need for 
any supplemental reporting of any event involving affiliates of the 
pooled plan provider, arguing that this registration requirement should 
be limited to pooled plan providers only. Other commenters, however, 
suggested that insolvency proceedings of affiliates may be relevant for 
purposes of this rule if the affiliate provides services to the pooled 
employer plan. The Department agrees with these commenters that 
insolvency proceedings of an affiliate of the pooled plan provider are 
more relevant when the affiliate is a service provider of the pooled 
employer plan, and less so when the affiliate has no service 
relationship to the plan. Information about an insolvency proceeding of 
an affiliate that does not provide services to the pooled employer 
plan, although not irrelevant, may be in excess of what is necessary 
for the Department to discharge its oversight obligations under the 
statute. Such information, moreover, may be of limited or no value to 
participating employers with respect to their selection and monitoring 
obligations identified in section 3(43) of ERISA. Accordingly, 
information about an insolvency proceeding of an affiliate does not 
have to be reported in a supplemental filing under the final rule, 
unless the affiliate is a service provider of a pooled employer plan. 
In these circumstances, the Department believes the cost of the 
disclosure is justified by its value to oversight officials. The 
Department added ``that provides services to any pooled employer plan'' 
to paragraph (b)(3)(ii) to effect this clarification.\16\
---------------------------------------------------------------------------

    \16\ In response to a comment seeking confirmation, the 
Department confirms that the supplemental reporting with respect to 
merger or acquisition relates only to ``M&A'' activity of the pooled 
plan provider, not any of its affiliates.
---------------------------------------------------------------------------

    One commenter suggested that the Department consider narrowing this 
proposed requirement even further to limit reporting of mergers and 
acquisitions of pooled plan providers. These events, according to this 
commenter, could be quite common for financial corporations and in some 
cases, may involve entities that will have no relation to the pooled 
employer plan. Instead of a blanket reporting obligation, the commenter 
recommend limiting this requirement to situations that will directly 
impact the pooled plan provider and its pooled employer plan offerings. 
The Department declines to adopt this suggestion because the pooled 
plan provider serves a critical role in sponsoring the pooled employer 
plan and therefore significant changes in its corporate or business 
structure may raise important considerations with respect to the plan. 
Unlike the disclosure provisions related to insolvency, this provision 
only applies to the pooled plan provider and does not apply to any 
affiliates. Therefore, the Department believes that the burden in 
providing this disclosure will be infrequent and low.
    3. Receipt of notice of new administrative proceedings or

[[Page 72946]]

enforcement actions. Paragraph (b)(3)(iii) of the proposed regulation 
required supplemental reporting by the registrant on ``receipt of 
written notice of the initiation of any administrative or enforcement 
action related to the provision of services to, operation of, or 
investments of any pooled employer plan or other employee benefit plan, 
in any court or administrative tribunal by any Federal or State 
governmental agency or other regulatory authority against the pooled 
plan provider or any officer, director, or employee of the pooled plan 
provider.'' Commenters raised similar concerns with this provision in 
the proposal as with paragraph (b)(1)(x) of the proposal (which dealt 
with disclosures of ongoing criminal, civil, or administrative 
proceedings). These concerns were mostly based upon the provision's 
scope and breadth, particularly regarding the types of actions, the 
types of administrative proceedings, and the class of actors against 
whom actions would be initiated. The Department narrowed the scope of 
paragraph (b)(1)(x) of the final rule in two ways, as discussed above 
in this preamble. The Department, therefore, narrowed the scope of 
paragraph (b)(3)(iii) of the final rule to match the scope of paragraph 
(b)(1)(x) of the final rule. Accordingly, paragraph (b)(3)(iii) of the 
final rule requires a supplemental filing if a pooled plan provider 
receives written notice of the initiation of any administrative 
proceeding or enforcement action in any court or administrative 
tribunal by any Federal or State governmental agency or other 
regulatory authority against the pooled plan provider, or any officer, 
director, or employee of the pooled plan provider involving a claim of 
fraud or dishonesty with respect to any employee benefit plan, or 
involving the mismanagement of plan assets. Timely knowledge of such 
actions will help the agencies fulfill their oversight functions and 
assist prospective and existing participating employers in properly 
carrying out their duties under the SECURE Act provisions with respect 
to selection and monitoring of pooled employer plans.
    4. Receipt of notice of finding of fraud, dishonesty, or 
mismanagement. Paragraph (b)(3)(iv) of the final regulation requires a 
supplemental filing if the registrant receives written notice of a 
negative finding in any matter described in paragraph (b)(1)(x) or 
(b)(3)(iii) of this section. This provision is essentially the same as 
its predecessor in the proposed rule, although changes were made to 
conform to revisions to paragraphs (b)(1)(x) and (b)(3)(iii) of the 
final rule. Those revisions to paragraphs (b)(1)(x) and (b)(3)(iii) of 
the final rule, which dictated the revisions to paragraph (b)(3)(iv), 
are discussed above in this preamble. The purpose of paragraph 
(b)(3)(iv) of the final regulation is to capture the findings, if 
negative, of the proceedings described in paragraphs (b)(1)(x) and 
(b)(3)(iii) of the final regulation. A decision is negative if there is 
finding of fraud or dishonesty related to providing services to any 
employee benefit plan (including a pooled employer plan), or if there 
is a finding of mismanagement of plan assets. This information is 
important for agency oversight and for participating employers with 
respect to their duties under the SECURE Act provisions regarding 
selection and monitoring of the pooled employer plans.
    5. Receipt of notice of filing of criminal charges. Paragraph 
(b)(3)(v) of the final rule requires a supplemental filing if a pooled 
plan provider receives written notice of the filing of any Federal or 
State criminal charges related to the provision of services to, 
operation of, or investments of any pooled employer plan or other 
employee benefit plan against the pooled plan provider or any officer, 
director, or employee of the pooled plan provider. Such actions, too, 
are relevant to the selection and monitoring obligations of 
participating employers, and while ERISA section 411 bars serving as an 
ERISA fiduciary following a wide range of crimes, this information is 
limited to those criminal charges related to the provision of services 
to, operation of, or investments of any pooled employer or other 
employee benefit plan. Commenters did not raise questions or concerns 
with this requirement. Therefore, the final rule adopts this provision 
as proposed.
    Although the final rule largely adopts the proposed criminal 
disclosures without change, the Department is concerned with potential 
reputational harm in the cases of persons acquitted of the criminal 
charges for which a prior reporting has been made under this section. 
To address this concern, the Department added paragraph (d) to the 
final rule. Paragraph (d) provides that a pooled plan provider may file 
an update to remove any matter previously reported under paragraph 
(b)(1)(ix) or (b)(3)(v) of the final rule for which the defendant has 
received an acquittal.'' For this purpose, the term ``acquittal'' means 
a finding by a judge or jury that a defendant is not guilty or any 
other dismissal or judgment which the government may not appeal and 
includes situations where a prosecuting authority voluntarily dismisses 
charges with an ability to subsequently re-file. Likewise, the 
Department reserves the right to remove such information independently 
or in response to a request from a person acquitted of such charges.

C. Amendment and Correction of Registration Information

    Pooled plan providers can file corrections and amendments of their 
initial registration and reportable event filings though the electronic 
filing system. 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.
    Further, the Department 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 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)). The questions would provide the Department, the 
Treasury Department, the IRS, participating employers, and other 
stakeholders with information that would allow them to connect the Form 
PR registration with the Form 5500 for all pooled employer plans 
operated by the registrant.

D. Final Filing

    If a pooled plan provider has ceased operating all pooled employer 
plans and has filed a supplemental reportable event filing to indicate 
that the last pooled employer plan for which it served as the pooled 
plan provider has been terminated and ceased operating, the provider is 
required to file a final registration filing. For this purpose, a plan 
is treated as terminated and having ceased operations when a resolution 
has been adopted terminating the plan, all

[[Page 72947]]

assets under the plan (including insurance/annuity contracts) have been 
properly distributed to the participants and beneficiaries or legally 
transferred to the control of another plan, and when a final Form 5500 
has been filed for the plan. 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,\17\ or (b) 45 days after such filing. A single 
combined filing may be used both to report the date that the last 
pooled employer plan operated by the provider has been terminated and 
ceased operating, including filing the final Form 5500 in accordance 
with its instructions, and to serve as the final Form PR filing by the 
pooled plan provider. The final filing assists the Department's 
maintenance of an accurate database of persons serving as pooled plan 
providers and provides accurate public information about pooled plan 
providers to employers, participants, beneficiaries, and other 
interested persons.
---------------------------------------------------------------------------

    \17\ A final Form 5500 cannot be filed for a pooled employer 
plan until all assets under the plan (including insurance/annuity 
contracts) have been distributed to the participants and 
beneficiaries or legally transferred to the control of another plan. 
The final Form 5500 must be filed, absent an extension of time, no 
later than the last day of the 7th calendar month after the end of 
the plan year in which the plan terminated, but it can be filed 
earlier, including as a short plan year filing, if the pooled 
employer plan were to cease having participants and beneficiaries 
and distribute all the assets in the middle of a plan year.
---------------------------------------------------------------------------

E. Electronic Filing

    This final regulation requires electronic filing of all pooled plan 
provider registrations with the Department. The Department 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. Regular 
mail is not the most efficient or cost-effective way to file and 
process this information. Because the internet is widely accessible to 
persons who the Department expects to be interested in being pooled 
plan providers, they will find electronic filing easier and more cost-
effective than paper filing. The electronic submission process will 
also assist pooled plan providers by ensuring that all required 
information is included in the registration before the electronic 
filing can be completed through the internet site. In addition, the 
process provides an electronic registration confirmation receipt. 
Electronic filing also will facilitate the disclosure of the 
information to participating employers, covered participants and 
beneficiaries, and other interested members of the public. Once a 
registration is filed, the data would be posted on the Department's 
website and be available to the public. Therefore, filers and data 
users all stand to benefit from electronic filing in ways that are 
consistent with the goals of the E-Government Act of 2002.\18\
---------------------------------------------------------------------------

    \18\ Public Law 107-347, sec. 2 (Dec. 17, 2002).
---------------------------------------------------------------------------

    Under ERISA Section 505, in addition to having the authority to 
prescribe such regulations the Department determines may be necessary 
or appropriate to carry out the provisions of Title I of ERISA, the 
Department has the authority to prescribe forms. The Department used 
this authority to create the Form PR. Form PR and the accompanying 
instructions are the required filing format for pooled plan provider 
registrations and the Form PR must be filed electronically with the 
Department of Labor at https://www.efast.dol.gov/.

F. Coordination With the Treasury Department and the Internal Revenue 
Service

    The SECURE Act requires pooled plan providers to register with the 
Department as well as with the Treasury Department and the IRS. The 
Department coordinated with those agencies to develop the final 
regulation. Filing the registration statement with the Department, 
including the supplemental statement identifying a pooled employer plan 
for which the pooled plan provider is acting in that capacity prior to 
the initiation of operations of each such plan, satisfies the Code 
requirement to register as a pooled plan provider with respect to that 
plan. The Department will continue to consult with the Treasury 
Department and the IRS in connection with their development of the 
pooled plan provider registration requirements and filing process.

G. Good Cause Finding for Immediate Registration

    The Administrative Procedure Act (5 U.S.C. 553 (d)) (APA) permits a 
rule to become effective immediately, rather than after a 30-day delay, 
if there is good cause to do so. The SECURE Act allows pooled plan 
providers to begin operations on January 1, 2021, but only if they 
first register with the Department. Commenters on the proposed rule 
requested that the Department make the registration process available 
as soon as possible. Some commenters even requested that the Department 
accept registrations before publication of a final rule. The Department 
agrees that pooled plan providers will benefit from having the ability 
to register immediately, and not wait for a 30-day effective date 
period. For those providers that plan to begin operating a pooled 
employer plan on January 1, 2021, making them wait for the expiration 
of the APA's 30-day effective-date period will unnecessarily compress 
their overall start-up obligations into a smaller window of time and 
may, in fact, impede a provider's contractual obligation to begin 
operation of a pooled employer plan on January 1, 2021. Moreover, no 
one is harmed by allowing registrants to file early, as the statute 
itself does not allow pooled employer plans to begin operations until 
January 1, 2021. In fact, an immediate effective date will allow 
important information to be publicly available that will enable 
employers, and ERISA plan participants and beneficiaries, more time to 
evaluate the bona fides of a particular pooled employer plan. 
Accordingly, the Department finds there is good cause for the final 
rule to become effective immediately, rather than after a 30-day delay.
Regulatory Impact Analysis
    Summary--The SECURE Act was enacted to expand retirement savings. 
Section 101 of the SECURE Act amends section 3(2) of ERISA to eliminate 
the commonality of interest requirement for establishing certain 
individual account plans, or ``pooled employer plans,'' that meet 
specific requirements. Among these requirements, such plans must 
designate a pooled plan provider to serve as a named fiduciary and as 
the plan administrator. Further, section 101 of the SECURE Act requires 
pooled plan providers to register with the Department and the Treasury 
Department before beginning operations. The statute expressly provides 
a separate authorization for the Department to require additional 
information.
    The Department has examined the effects of this rule as required by 
Executive Order 12866,\19\ Executive Order 13563,\20\ the Congressional 
Review Act,\21\ Executive Order 13771,\22\ the Paperwork Reduction Act 
of 1995,\23\ the Regulatory Flexibility Act,\24\ section 202 of the 
Unfunded Mandates Reform

[[Page 72948]]

Act of 1995,\25\ and Executive Order 13132.\26\
---------------------------------------------------------------------------

    \19\ Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993).
    \20\ Improving Regulation and Regulatory Review, 76 FR 3821 
(Jan. 18, 2011).
    \21\ 5 U.S.C. 804(2) (1996).
    \22\ Reducing Regulation and Controlling Regulatory Costs, 82 FR 
9339 (Jan. 30, 2017).
    \23\ 44 U.S.C. 3506(c)(2)(A) (1995).
    \24\ 5 U.S.C. 601 et seq. (1980).
    \25\ 2 U.S.C. 1501 et seq. (1995).
    \26\ Federalism, 64 FR 153 (Aug. 4, 1999).
---------------------------------------------------------------------------

1.1. Executive Orders
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, select regulatory approaches that maximize net 
benefits (including potential economic, environmental, public health, 
and safety effects; distributive impacts; and equity). Executive Order 
13563 emphasizes the importance of quantifying costs and benefits, 
reducing costs, harmonizing rules, and promoting flexibility.
    Under Executive Order 12866, ``significant'' regulatory actions are 
subject to review by the Office of Management and Budget (OMB).\27\ 
Section 3(f) of the Executive Order defines a ``significant regulatory 
action'' as an action that is likely to produce a rule that does any of 
the following:
---------------------------------------------------------------------------

    \27\ Regulatory Planning and Review, supra note 2.
---------------------------------------------------------------------------

    (1) Has an annual effect on the economy of $100 million or more in 
any one year, or adversely and materially affects a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local or tribal governments or communities 
(such actions are also referred to as ``economically significant'');
    (2) creates a serious inconsistency or otherwise interferes with an 
action taken or planned by another agency;
    (3) materially alters the budgetary impacts of entitlement grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    (4) raises novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    A full regulatory impact analysis must be prepared for major rules 
with economically significant effects (for example, impacts of $100 
million or more in any one year), and OMB reviews ``significant'' 
regulatory actions. OMB determined that this rule is not economically 
significant within the meaning of section 3(f)(1) of the Executive 
Order but is significant under 3(f)(4). Therefore, the Department has 
provided an assessment of the potential costs, benefits, and transfers 
associated with this final rule. In accordance with the provisions of 
Executive Order 12866, OMB has reviewed this final rule.
1.2. Introduction and Need for Regulation
    As added by the SECURE Act, section 3(44) of ERISA requires a 
person to register as a pooled plan provider with the Secretary, and 
provide other information the Secretary may require, before operating a 
pooled employer plan. This final rule responds to the direction given 
to the Secretary in the SECURE Act and specifies the requirements for 
registering with the Secretary.
    The required information allows the Department to identify pooled 
plan providers so that it may monitor their actions. While the Form 
5500, which pooled plan providers will also be required to file, 
collects important information, Form 5500 reporting is generally 
unavailable for more than 18 months after a plan starts. The SECURE 
Act's registration requirement gives the Department more immediate 
access to pooled plan provider information, allowing the Department 
(and other agencies) to observe how this new market develops and assess 
the need for further guidance.
1.3. Affected Entities
    The goal of the SECURE Act is to increase retirement savings, 
particularly by expanding the options for small employers to 
participate in multiple employer plans, such as pooled employer plans. 
The Department expects this expansion to produce administrative savings 
and new opportunities to provide retirement savings plans for many 
small employers. Section 101 of the SECURE Act allows commercial 
service providers to serve as plan administrators and named fiduciaries 
of defined contribution pension plans that offer retirement benefits to 
the employees of more than one unrelated employer. Expanding the ways 
in which service providers and employers may craft and join multiple 
employer plans (including pooled employer plans) should reduce costs 
and administrative burdens for participating employers. For example, a 
single Form 5500 filing by the pooled plan provider would satisfy the 
annual reporting requirement for all the participating employers, 
instead of separate Form 5500 filings and audits for each individual 
employer. Pooled plan providers would be both a named fiduciary and 
plan administrator for the pooled employer plan, and they are required 
to register with the Department before operating any such plans.
    The Department has identified certain existing entities that it 
believes would be most likely to serve as pooled plan providers. For 
example, recordkeepers that currently administer retirement plans may 
be well positioned to serve as pooled plan providers and some 
recordkeepers have affiliated entities that may seek to provide 
investment alternatives and services to the plan. Similarly, many 
Professional Employer Organizations (PEOs) have served as plan 
administrators and would likely have relevant experience to serve as 
pooled plan providers. Further, insurance companies have expressed 
interest in serving as pooled plan providers and some have prior 
experience providing similar services. Chambers of Commerce have 
connections with employers, but many are small with few full-time 
staff. Also, few Chambers of Commerce have sponsored MEWAs. While 
retirement plan advisors such as broker-dealers and registered 
investment advisers are also plausible candidates, the Department 
believes that some would be reluctant to assume the named fiduciary and 
plan administrator roles. Entities such as registered investment 
advisors may be more comfortable serving as section 3(38) investment 
managers for the pooled plan providers.
    Given these considerations, the Department estimates that 
approximately 3,200 unique entities will initially register to serve as 
pooled plan providers. Recordkeepers and plan administrators of 
existing defined contribution plans are most likely to enter the 
market, followed by PEOs, direct annuity writers, Chambers of Commerce, 
and plan advisors.

                                         Estimated Pooled Plan Provider
----------------------------------------------------------------------------------------------------------------
                                                                                  Expected share     Estimated
                                                                     Universe           (%)           number
----------------------------------------------------------------------------------------------------------------
Unique Recordkeepers and Plan Administrators for existing DC               2,378              50           1,189
 Plans \a\......................................................
Professional Employer Organizations \b\.........................             907              25             227

[[Page 72949]]

 
Chambers of Commerce \c\........................................           4,000               5             200
Large Broker-Dealers \d\........................................             173               5               9
Registered Investment Adviser Firms \d\.........................          30,246               5           1,512
Direct Annuity Writers (Insurance Companies) \e\................             386              25              97
                                                                 -----------------------------------------------
    Total.......................................................          38,090               8           3,233
----------------------------------------------------------------------------------------------------------------
\a\ 2017 Form 5500 Schedule C Data.
\b\ National Association of Professional Employers, https://www.napeo.org/what-is-a-peo/about-the-peo-industry/industry-statistics'' https://www.napeo.org/what-is-a-peo/about-the-peo-industry/industry-statistics.
\c\ Association of Chamber of Commerce Executives reports that there are 4,000 Chambers with at least 1 full-
  time staff person.
\d\ 2019 FINRA Industry Snapshot. FINRA reported 3,607 FINRA registered firms in 2018. There were 173 with 500
  or more registered representatives.
\e\ National Association of Insurance Commissioners.

1.4. Benefits
    The SECURE Act requirement that pooled plan providers first 
register with the Department before beginning operations alerts 
regulators to the presence and intent of new entities. Registering 
allows potential pooled plan providers access to this newly created 
market. These registrations would require contact information, the 
address of any public website(s) of the pooled plan provider or 
affiliates used to market such person as pooled plan provider to the 
public, and the date operations are expected to commence. The 
registrations will be publicly available and provide a complete list of 
registered pooled plan providers. In addition, the supplemental filing 
requirement ensures that providers update their initial filing to 
report changes relevant to the pooled plan provider's and participating 
employers' fiduciary duties (including, for example, inception of 
bankruptcy and criminal or regulatory enforcement actions against the 
pooled plan provider involving a claim of fraud or dishonesty with 
respect to any employee benefit plan, or involving the mismanagement of 
plan assets). This will help provide transparency regarding the 
provider's management and business practices, allowing employers to 
better survey the market when choosing a pooled plan provider or 
deciding whether to continue to rely on an existing provider and 
enabling the Department and Treasury Department to carry out their 
statutory oversight duties.
    Some commenters were concerned that the information required in the 
registration would expose pooled plan providers to litigation risk and 
a heightened degree of regulatory scrutiny. Some commenters also were 
concerned that disclosing ongoing criminal, civil, or administrative 
proceedings against the pooled plan providers would deter employers 
from engaging with pooled plan providers. While the Department 
acknowledges these concerns, the Department believes that the 
registration and supplemental filing requirements will provide the 
Department, other agencies, and potential or participating employers 
information (including transparency regarding fraud, dishonesty, and 
mismanagement of plan assets) they need to discharge their legal 
obligations under the law.
    In the Department's view, the statutory purpose of the registration 
requirement is to provide the Department with sufficient information 
about entities acting as pooled plan providers to engage in effective 
monitoring and oversight of this new type of ERISA retirement plan. As 
discussed above, the potential for inadequate employer oversight of the 
activities of a pooled employer plan and its plan fiduciaries and other 
service providers may be greater than is true of other plans sponsored 
by employers because the participating employers in pooled employer 
plans give more responsibility to the pooled plan provider than they 
typically give service providers in other plan arrangements. The final 
regulation's information collection, which the Department has limited 
to minimize burden, will assist the Department in fulfilling its 
oversight responsibilities. Disclosure of any websites containing 
marketing information for any pooled employer plan(s) established by 
the provider, the date operations are expected to commence, and changes 
relevant to the pooled plan provider's fiduciary duties (including, for 
example, bankruptcy, litigation, and ongoing criminal or regulatory 
enforcement actions involving fraud or dishonesty) all serve to help 
with monitoring and oversight.
    As stated above, the SECURE Act amended ERISA to remove possible 
barriers to the broader use of multiple employer plans. This objective 
was accomplished primarily by allowing multiple unrelated employers to 
participate in an open MEP called a pooled employer plan that does not 
require commonality among participating employers or a genuine 
organizational relationship unrelated to participation in the plan. By 
allowing most of the administrative and fiduciary responsibilities of 
sponsoring a retirement plan to be transferred to pooled plan 
providers, pooled employer plans give employers the option of providing 
a workplace retirement plan to their employees with reduced burdens and 
costs as compared to sponsoring their own separate single employer 
retirement plan. Consequently, more plan formation and broader 
availability of workplace retirement plans should occur, especially 
among small employers.
    The Department is uncertain of the number of pooled employer plans 
that could be created based on the final rule, the number of employers 
that will participate in such plans, and the number of participants and 
beneficiaries that will be covered by them. The Department is 
confident, however, that pooled employer plans will be created to take 
advantage of the new statutory structure.
    It is possible that each pooled plan provider that registers will 
offer at least one new pooled employer plan and larger pooled plan 
providers will offer more than one new pooled employer plan. As is the 
case with multiple employer plans generally, pooled employer plans are 
likely to vary substantially in size, although small pooled employer 
plans are less likely to offer the economies of scale that could exist 
for large or very large pooled employer plans.
    The effects on coverage are somewhat uncertain because of the 
possibility of at

[[Page 72950]]

least some zero-sum gain. Some new pooled employer plans will attract 
participating employers that currently do not offer retirement savings 
opportunities to their employees. The result in this situation would be 
a net coverage increase, and retirement security could be improved to 
some extent for the employees of these participating employers.\28\ At 
the same time, however, the Department expects that some existing 
retirement plans, most likely those of small single employer plan 
sponsors, could terminate or otherwise cease to operate in their 
current form and merge into pooled employer plans. A dominant influence 
in this direction would be the administrative cost savings and other 
operational efficiencies that come with economies of scale. The 
Department has repeatedly acknowledged the potential benefits that 
could accrue to small employers and their employees if they join 
together in multiple employer plans and similar cooperative 
arrangements.\29\
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    \28\ Workplace retirement plans often provide a more effective 
way for employees to save for retirement than saving in their own 
IRAs. Compared with saving on their own in IRAs, workplace 
retirement plans offer employees (1) higher contribution limits; (2) 
generally lower investment management fees as the size of plan 
assets increases; (3) a well-established uniform regulatory 
structure with important consumer protections, including fiduciary 
obligations, recordkeeping and disclosure requirements, legal 
accountability provisions, and spousal protections; (4) automatic 
enrollment; and (5) stronger protections from creditors. At the same 
time, workplace retirement plans provide employers with choice among 
plan features and the flexibility to tailor retirement plans that 
meet their business and employment needs. See 84 FR 37528.
    \29\ 84 FR 37508 (July 31, 2019) (Definition of ``Employer'' 
Under Section 3(5) of ERISA--Association Retirement Plans and Other 
Multiple-Employer Plans); see also 83 FR28912 (June 21, 2018) 
(Definition of ``Employer'' Under Section 3(5) of ERISA--Association 
Health Plans).
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    For different reasons, though, it also is possible that some 
existing multiple employer plans would convert to pooled employer 
plans.\30\ According to the most recent Form 5500 data, there are 4,523 
defined contribution multiple employer plans.\31\ Conversions of this 
type might occur, for example, if a multiple employer plan were to 
conclude that restrictions under section 3(5) of ERISA, such as the 
geographic limitations imposed pursuant to 29 CFR 2510.3-55(b)(2), the 
substantial employment function test for bona fide professional 
employer organization arrangements in 2510.3-55(c)(1), or the tests 
articulated in the Department's subregulatory guidance for an entity to 
be considered a bona fide group or association of employers were 
disadvantageous or inefficient relative to the conditions for being a 
pooled employer plan.
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    \30\ Section 101 of SECURE Act itself contemplates such 
conversions and provides a special rule for existing plans to elect 
pooled employer plan status (new section 3(43)(C)) of ERISA).
    \31\ Private Pension Plan Bulletin: Abstract of 2018 Form 5500 
Annual Reports, Employee Benefits Security Administration 
(forthcoming 2020).
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    The total number of defined contribution plans, therefore, could 
decrease as a result of these mergers and conversions. Even so, 
however, net coverage (i.e., the number of total defined contribution 
plan participants) could increase, because (1) participants in plans 
that merge or convert into pooled employer plans would continue to be 
covered under a retirement plan, and (2) some employers that do not 
currently provide their employees with retirement plan access would 
join pooled employer plans and their employees would count as newly-
covered participants.
    Pooled employer plans generally would benefit from scale advantages 
that small businesses do not currently enjoy, and the Department 
expects that such plans will pass some of the attendant savings onto 
participating employers and participants. Large scale may create two 
distinct economic advantages for pooled employer plans. First, as scale 
increases, marginal costs for pooled employer plans would diminish and 
pooled plan providers would spread fixed costs over a larger pool of 
member employers and employee participants, creating direct economic 
efficiencies. Second, asset managers commonly offer proportionately 
lower prices, relative to money invested, to larger investors, under 
so-called tiered pricing practices resulting in decreased expense 
ratios based on the aggregate amount of money invested by a single 
pooled employer plan.
    For example, larger plans tend to have lower fees overall.\32\ 
Generally, small plans with 10 participants pay approximately 50 basis 
points more than plans with 1,000 participants.\33\ Small plans with 10 
participants pay about 90 basis points more than large plans with 
50,000 participants. Grouping small employers together into a pooled 
employer plan could facilitate savings through administrative 
efficiencies and sometimes through price negotiation (market power). 
The degree of potential savings may be different for different types of 
administrative functions, e.g., scale efficiencies can be very large 
with respect to asset management, and may be smaller, but still 
meaningful, with respect to functions such as marketing, distribution, 
asset management, recordkeeping, and transaction processing.
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    \32\ 84 FR 37508, 37535.
    \33\ Deloitte Consulting and Investment Company Institute, 
Inside the Structure of Defined Contribution/401(k) Plan Fees, 2013: 
A Study Assessing the Mechanics of the ``All-in'' Fee (Aug. 2014). 
Deloitte Consulting LLP conducted a survey of 361 defined 
contribution plans for the Investment Company Institute. The study 
calculates an ``all in'' fee that is comparable across plans 
including both administrative and investment fees paid by the plan 
and the participant. Deloitte predicted these estimates by analyzing 
the survey results using a regression approach calculating basis 
points as a share of assets. See 84 FR 37508, 37535.
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    Other potential benefits of the expansion of MEPs through the 
creation of pooled employer plans could include (1) increased economic 
efficiency as small businesses can more easily compete with larger 
companies in recruiting and retaining workers due to a competitive 
employee benefit package; (2) enhanced portability for employees that 
leave employment with an employer to work for another employer 
participating in the same pooled employer plan; (3) higher quality data 
(more accurate and complete) reported to the Department on the Forms PR 
and 5500; and (4) increased operating efficiency for small businesses 
by shifting the administrative burden associated with establishing and 
maintaining a retirement plan to a pooled plan provider.
1.5. Costs
    The costs most directly associated with this rule are those 
incurred to prepare and submit the registration statement. The PRA 
section, below, discusses these costs in detail. As required under E.O. 
13771, the estimated cost is $688,000 in the first year and $72,400 in 
subsequent years.\34\ The perpetual time horizon annualized cost is 
$106,100 in 2016 dollars, using a seven percent discount percent rate, 
discounted from 2016. Other indirect costs may also be attributed to 
the regulation, depending on the extent of pooled employer plan 
formation, as well as the extent of conversions, mergers, and 
contractions among existing plans. The likely extent of these actions 
and associated costs is highly uncertain. With respect to any new 
pooled employer plan, these indirect costs would relate to a pooled 
plan provider complying with the requirements of the SECURE Act that 
are not codified by this final regulation.
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    \34\ The total ten-year cost is $1,215,000 with a three percent 
discount rate and $1,084,000 with a seven percent discount rate. The 
annualized ten-year cost is $142,000 using a three percent discount 
rate, and $154,000 using a seven percent discount rate.

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[[Page 72951]]

    Some commenters suggested that the final rule's reporting 
requirements would be burdensome and duplicative of other ERISA-
required reporting requirements. One commenter asserted that the pooled 
plan provider should not be required to report any information other 
than the pooled plan provider's basic contact and identifying 
information. While the Department acknowledges these concerns, the Form 
5500 data generally is not available for 18 months after a plan starts 
operation. Therefore, the Form PR will provide the Department with more 
immediate access to pooled plan provider information. This will allow 
the Department to monitor pooled plan providers and assess the need for 
further guidance, which will help protect the interests of plan 
participants and beneficiaries. In addition, changes to the proposed 
rule have been made to address overbreadth and redundancy concerns.
    Another commenter suggested that disclosing the pooled plan 
provider's compliance officer would be burdensome, positing that the 
Department was effectively requiring pooled plan providers to create a 
compliance officer role. The Department has now clarified that this is 
not the case. The final rule simply requires an identification of, and 
basic contact information for, the person, unit, or element designated 
by the pooled plan provider as the point-person responsible for 
fielding and addressing questions about the pooled plan provider's 
status under ERISA and the Code. Put differently, this provision 
requires nothing more than for the company to identify whom it wishes 
to receive and address status and compliance-oriented questions. The 
Department has tailored this provision as narrowly as possible to 
advance its intended objective without requiring any changes in 
business practices. Thus, the Department does not expect that pooled 
plan providers will incur costs to hire additional employees to serve 
as responsible compliance officials.
1.6. Transfers
    Several potential transfers could occur because of this final rule. 
To the extent the formation of pooled employer plans leads employers 
that previously sponsored retirement plans to terminate or freeze these 
plans and join a pooled employer plan, there may be a transfer if the 
pooled employer plan has different service providers and asset types 
than the terminated plan. A similar transfer might occur in cases where 
employers who previously did not offer their employees a retirement 
plan join a pooled employer plan. Employees of these employers may have 
been saving for retirement previously in different ways, such as 
through an IRA, which would have different service providers. Service 
providers that specialize in providing services to pooled employer 
plans or are affiliated with a pooled plan provider might benefit at 
the expense of other providers who specialize in providing services to 
small plans or IRAs. Those different service providers would experience 
gains or losses of income or market share.
    The rule could also result in asset transfers if pooled plan 
providers invest in different types of assets than plans that merge or 
convert to pooled employer plans. For example, small plans tend to rely 
more on mutual funds, while larger plans have greater access to other 
types of investment vehicles such as bank common collective trusts and 
insurance company pooled separate accounts, which allow for 
specialization and plan specific fees. This movement of assets could 
see profits move from mutual funds to other types of investment 
managers.
    Finally, the Code generally gives tax advantages to certain 
retirement savings over most other forms of savings.\35\ Consequently, 
all else being equal, workers who are saving money in tax qualified 
retirement savings vehicles generally can enjoy higher lifetime 
consumption and wealth than those who do not. The magnitude of the 
relative advantage generally depends on the worker's tax bracket, the 
amount contributed to the plan, the timing of contributions and 
withdrawals, and the investment performance of the assets in the 
account. Workers that do not contribute to a qualified retirement 
savings vehicle because they lack access to a workplace retirement plan 
do not reap this relative advantage. This rule would likely increase 
the number of American workers with access to tax-qualified workplace 
retirement plans, which would spread this financial advantage to some 
people who are not currently receiving it. If access to retirement 
plans and savings increase because of this rule, a transfer will occur 
flowing from all taxpayers to those individuals receiving tax 
preferences as a result of new and increased retirement savings.
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    \35\ Employer contributions to qualified pension plans and, 
generally, employee contributions made at the election of the 
employee through salary reduction are not taxed until distributed to 
the employee, and income earned on those amounts is not taxed until 
distributed. The tax expenditure for ``net exclusion of pension 
contributions and earnings'' is computed as the income taxes forgone 
on current tax-excluded pension contributions and earnings less the 
income taxes paid on current pension distributions.
---------------------------------------------------------------------------

    As is evident from the foregoing, the exact magnitude of the 
potential transfers is uncertain at this stage, as are the precise 
identities of the transferors and transferees. Much depends on the 
number of pooled employer plans that eventually come into existence, 
the extent of plan consolidation, the number of employers that begin 
participating anew in pooled employer plans, and the savings habits of 
the employees of these employers (who might have heretofore been saving 
through an IRA). Major influences on each of these factors include, 
among other things, the nature, extent, and timing of the regulatory 
intervention needed to implement the SECURE Act, as well as the general 
state of the economy.
1.7. Uncertainty
    While the Department has identified types of service providers that 
it believes will be well positioned to act as pooled plan providers, it 
is unclear how many will choose to enter the market and whether they 
will do so in the first year of enactment or in later years. The 
Department solicited comments on which and how many entities are likely 
to register as pooled plan providers. However, the Department did not 
receive comments that specifically addressed this question. Thus, the 
Department has based its assumptions on discussions with stakeholders 
and articles on emerging markets.
1.8. Regulatory Alternatives
    Section 101 of the SECURE Act requires pooled plan providers to 
register with the Secretary and provide such other information as the 
Secretary may require, before beginning operations as a pooled plan 
provider. The Department considered several alternative forms of 
information to be included that are discussed below.
    The Department could have required fewer data elements, such as 
contact information only, including address and email. While slightly 
less burdensome than the final rule's requirements, requiring fewer 
data elements would provide substantially less information to the 
Department, which would impede its ability to fulfill its critical 
oversight role of protecting participants and plan assets. Employers 
also would receive less information to survey the market when choosing 
a pooled plan provider or deciding whether to continue to rely on an 
existing provider.
    The Department considered requiring pooled plan providers to file a

[[Page 72952]]

registration for each pooled employer plan. This would have required 
pooled plan providers to file multiple similar filings. The Department 
did not choose this option, because it would have required pooled 
service providers to make multiple filings while providing minimal 
additional benefits.
    The Department also considered not requiring pooled service 
providers to make supplemental filings. While this option would have 
been less burdensome than the chosen option, it would have provided 
less information to the Department and interested employers. Requiring 
pooled service providers to report updated information to the 
Department can provide key information the Department needs to fulfill 
its oversight role. Therefore, the Department determined that the 
benefits of requiring supplemental filings justify any additional cost 
that pooled plan providers would incur to furnish the updated 
information.
2. Paperwork Reduction Act
    In accordance with the Paperwork Reduction Act of 1995 (PRA 95) (44 
U.S.C. 3506(c)(2)(A)), the Department solicited comments concerning the 
information collection request (ICR) included in the Registration 
Requirements to Serve as a Pooled Plan Provider to Pooled Employer 
Plans ICR (85 FR 54288). At the same time, the Department also 
submitted an information collection request (ICR) to the Office of 
Management and Budget (OMB), in accordance with 44 U.S.C. 3507(d).
    The Department did not receive comments that specifically addressed 
the paperwork burden analysis of the information collection requirement 
contained in the proposed rule.
    In connection with publication of this final rule, the Department 
submitted an ICR to OMB requesting approval of a new collection of 
information under OMB Control Number 1210-0164, which expires on 
November 30, 2023. OMB approved the ICR on November 16, 2020.
    A copy of the ICR may be obtained by contacting the PRA addressee 
shown below or at www.RegInfo.gov. PRA ADDRESSEE: G. Christopher Cosby, 
Office of Regulations and Interpretations, U.S. Department of Labor, 
Employee Benefits Security Administration, 200 Constitution Avenue NW, 
Room N-5718, Washington, DC 20210; [email protected]. Telephone: 202-
693-8410; Fax: 202-219-4745. These are not toll-free numbers.
    The SECURE Act requires a person to register as a pooled plan 
provider with the Secretary, and provide other information the 
Secretary may require, before beginning operations. This information 
collection contains the requirements to register with the Secretary 
under section 3(44) of the Act. The information collection will use the 
same EFAST 2 electronic filing system that pooled plan providers will 
use to file the Form 5500 required to be filed on behalf of the pooled 
employer plan the provider operates.
    The Department has designed a two-part approach for this 
requirement. The first consists of a simple registration of mainly 
contact information and links to marketing websites. Pooled plan 
providers must electronically register with the Department at least 30 
days before beginning operations. Pooled plan providers that will 
initiate operations of a plan as a pooled employer plan on or after 
January 1, 2021, can register anytime before February 1, 2021, provided 
that the registration is filed ``on or before'' the initiation of 
operations of a plan as a pooled employer plan. The 30-day waiting 
period between registration and the start of plan operations for these 
pooled plan providers will be waived. The information included in the 
registration should be collected by the pooled plan provider during its 
normal course of business, so collection should not require additional 
effort by the administrator. The Department estimates that compiling 
and submitting the initial registration information will take about 45 
minutes and impose no additional costs on the administrator. To limit 
costs, a pooled plan provider needs to file only one registration 
regardless of the number of pooled employer plans it operates, provided 
that a supplemental statement is filed identifying each pooled employer 
plan before the initiation of operations of the plan as a pooled 
employer plan. Assuming roughly 3,200 pooled plan providers, the 
Department estimates a burden of 2,425 hours, with an equivalent cost 
of $402,000, in the first year.\36\
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    \36\ 3,223 pooled plan providers * 0.75 hours = 2,425 hours. 
2,425 hours * $165.63 = $401,653. Labor rates are EBSA estimates, 
found at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.
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    If the pooled plan provider does not begin operating any new pooled 
employer plans, does not change its contact information, or does not 
experience any changes as described in the final rule, it may go for a 
period of months or years without needing to supplement its 
registration. The Department anticipates that this will often be the 
case.
    Pooled plan providers are required to file a supplemental filing 
within the later of 30 days after the calendar quarter in which a 
reportable event occurred or 45 days after a reportable event. The 
supplemental filing requirement is similar to, although more limited 
than, filers' obligations with respect to the Form M-1, which requires 
entities to submit additional filings to document changes. 
Approximately seven percent of entities filing a Form M-1 in 2017 
submitted an additional filing after undergoing a change. Assuming 
pooled plan providers will behave in a similar manner, the Department 
estimates that approximately 230 pooled plan providers will submit 
supplemental filings documenting changes annually, including in the 
first year.
    The supplemental filing amends the original registration to include 
information either for pooled employer plans that begin operations or 
cease operations, or for material changes relevant to the pooled plan 
provider's fiduciary duties (including, for example, bankruptcy, 
litigation, and criminal or regulatory enforcement actions involving 
fraud or dishonesty). Accordingly, the Department estimates the 
supplemental filing will take 30 minutes for pooled plan providers to 
submit. The Department does not believe, however, that the pooled plan 
provider will incur any additional costs beyond the labor costs 
necessary to collect and submit this information. The Department 
estimates that there will be 3,460 filings under the second part of 
this requirement in the first year, imposing a burden of 1,730 hours, 
with an equivalent cost of $287,000.\37\
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    \37\ 3,460 pooled plan providers * 0.50 hour = 1,730 hours. 
1,730 hours * $165.63 = $286,540. Labor rates are EBSA estimates, 
found at https://www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.
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    In subsequent years, the Department believes that the percentage of 
pooled plan providers reporting beginning or ceasing operations of 
pooled employer plans will roughly parallel the experience of Form M-1 
filers. Approximately 14 percent of Form M-1 filers indicated they 
began operations in 2017, while six percent indicated they ceased 
operations.\38\ Assuming pooled plan providers behave in a similar 
manner, the Department expects an additional 650 registrations related 
to

[[Page 72953]]

beginning or ceasing operations annually in subsequent years.\39\ These 
filings have an associated hour burden of 324 hours with an equivalent 
cost of nearly $54,000 in subsequent years.
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    \38\ Pension plans face additional burdens in terminating, and 
so using welfare plans termination rates as a proxy may overstate 
the number of incidents.
    \39\ 3,233 * 0.14 = 453 pooled plan providers report pooled 
employer plans beginning operation, 453 pooled plan providers * 0.50 
hour = 227 hours. 227 hours * $165.63 = $37,598 3,233 * 0.06 = 453 
pooled plan providers report pooled employer plans ending operation, 
194 pooled plan providers * 0.50 hour = 977 hours. 97 hours * 
$165.63 = $16,060.
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    The estimated total burden of this information collection is 4,155 
hours, with an equivalent cost of $688,000, in the first year and 437 
hours, with an equivalent cost of $72,400, in subsequent years.\40\
---------------------------------------------------------------------------

    \40\ 873 filings * 0.5 hours = 437 hours. The 873 filings in 
subsequent years are 453 pooled plan providers reporting pooled 
employer plans beginning operations, 194 pooled plan providers 
reporting pooled employer plans ending operations, and 226 pooled 
plan providers filing other changes.
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    The Department expects many pooled plan providers will file the 
first part of registrations in the initial year, and significantly 
fewer will file in subsequent years as the market stabilizes. Incidents 
of filing updated and amended registration statements are expected to 
increase after the first year, as pooled employer plans enter and exit 
the market, change service providers, and change pooled employer plan 
offerings.
    A summary of paperwork burden estimates follows:
    Type of Review: New collection.
    Agency: Employee Benefits Security Administration, U.S. Department 
of Labor.
    Title: Registration Requirements To Serve as a Pooled Plan Provider 
To Pooled Employer Plans.
    OMB Control Number: 1210-0164.
    Affected Public: Businesses or other for-profits.
    Estimated Number of Respondents: 1,660 3-year average (3,233 first 
year, 873 subsequent years).
    Estimated Number of Annual Responses: 2,813 3-year average (6,693 
first year, 873 subsequent years).
    Frequency of Response: Occasionally.
    Estimated Total Annual Burden Hours: 1,676 3-year average (4,155 
first year, 437 subsequent years).
    Estimated Total Annual Burden Cost: 0.
3. Regulatory Flexibility Act
    The Regulatory Flexibility Act (RFA) \41\ imposes certain 
requirements with respect to Federal rules that are (1) subject to the 
notice and comment requirements of section 553(b) of the Administrative 
Procedure Act \42\ and (2) likely to have a significant economic impact 
on a substantial number of small entities. Unless an agency determines 
that a final rule is not likely to have a significant economic impact 
on a substantial number of small entities, section 604 of the RFA 
requires the agency to present a final regulatory flexibility analysis 
of the final rule. The Department has determined that this final rule, 
which would require prospective pooled plan providers to register with 
the Department prior to beginning operations, is not likely to have a 
significant economic impact on a substantial number of small entities. 
Therefore, the Department certifies that the final rule will not have a 
significant economic impact on a substantial number of small entities. 
The Department estimates that only about eight percent of the potential 
market will be subject to the rule as pooled plan providers. Each of 
these entities would incur an estimated cost of $124 to register and 
$83 to update the registration if needed. Below is justification for 
this determination.
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    \41\ 5 U.S.C. 601 et seq. (1980).
    \42\ 5 U.S.C. 551 et seq. (1946).
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3.1. Need for and Objectives of the Rule
    Section 101 of the SECURE Act requires pooled plan providers to 
register with the Department, the Treasury Department, and the IRS. As 
noted above, the Treasury Department and the IRS have indicated that 
filing the registration statement with the Department will also satisfy 
the Code's registration requirement. The information required to be 
reported under the final rule would allow regulators to identify and 
monitor pooled plan providers. While some of the required information 
may be found in the Form 5500, which pooled plan providers will also be 
required to file on behalf of each participating employer plan they 
operate, this reporting is not available for more than 18 months after 
the pooled plan providers begin operating. The Form 5500, however, 
would not necessarily include some important information regarding the 
pooled plan providers themselves, such as bankruptcy filings, or the 
commencement of any criminal, civil, or administrative proceedings 
involving a claim of fraud or dishonesty with respect to any employee 
benefit plan or involving the mismanagement of plan assets. Requiring 
pooled plan providers to register gives both the agencies and the 
public, including participating employers, more immediate access to the 
information for monitoring purposes, and enables the agencies to 
monitor how this new market develops and assess whether further 
guidance is needed.
3.2. Affected Small Entities
    The Department has identified certain existing entities that it 
believes would be most likely to serve as pooled plan providers. For 
example, recordkeepers that currently administer retirement plans are 
well positioned to serve as pooled plan providers. Similarly, many PEOs 
have served as plan administrators and would likely have little trouble 
taking on the role of pooled plan provider. Further, many insurers have 
expressed interest in serving as pooled plan providers. While 
retirement plan advisors such as broker-dealers and registered 
investment advisors are also plausible candidates, the Department 
believes that many would be reluctant to assume the named fiduciary and 
plan administrator roles. Entities such as registered investment 
advisors may likely be more comfortable serving as section 3(38) 
investment managers for the pooled plan providers.
    Based on such considerations, the Department estimates that roughly 
3,200 unique entities will initially register to serve as pooled plan 
providers. Recordkeepers and plan administrators of existing defined 
contribution pension plans are most likely to enter the market, 
followed by PEOs, chambers of commerce, and plan advisors.
    While the Department does not have complete information on which of 
these entities meet the Small Business Administration's definition of a 
small entity, many of these entities likely are small. The Department 
estimates that about half of current recordkeepers and plan 
administrators currently serving defined contribution plans would 
register to become pooled plan providers. Other types of providers will 
likely comprise a smaller share of entities that register. Overall, the 
Department estimates that about eight percent of the universe of 
entities the Department has identified as well-suited to serve as 
pooled plan providers are likely to register. The table below includes 
both large and small entities. The Department cannot estimate with 
specificity the distribution by size of the providers that will choose 
to become pooled plan providers. However, most of the providers in 
these service categories meet the Small Business Administration 
definition of small entities. If the percentages in the footnote are 
applied to the number of affected entities in the table below, about 
2,600 businesses could be small businesses.\43\
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    \43\ Some possible affected industries by NAICS code are as 
follows: 524292 third-party administration, more than 90 percent 
small business; 524113 underwriting annuities and life insurance, 
more than 70 percent small business; 523999 financial investment 
services, more than 95 percent small businesses; 523999 brokerage, 
financial investment services, more than 95 percent small business; 
561330 professional employer organization, more than 90 percent 
small business.

[[Page 72954]]



                                         Estimated Pooled Plan Provider
----------------------------------------------------------------------------------------------------------------
                                                                                     Expected        Estimated
                                                                     Universe       share  (%)        number
----------------------------------------------------------------------------------------------------------------
Unique Recordkeepers and Plan Administrators for existing DC               2,378              50            1189
 Plans \a\......................................................
Professional Employer Organizations \b\.........................             907              25             227
Chambers of Commerce \c\........................................           4,000               5             200
Large Broker-Dealers \d\........................................             173               5               9
Registered Investment Advisor Firms \d\.........................          30,246               5            1512
Direct Annuity Writers (Insurance Companies) \e\................             386              25              97
                                                                 -----------------------------------------------
    Total.......................................................          38,090               8           3,233
----------------------------------------------------------------------------------------------------------------
\a\ 2017 Form 5500 Schedule C Data.
\b\ National Association of Professional Employers, https://www.napeo.org/what-is-a-peo/about-the-peo-industry/industry-statistics.
\c\ Association of Chamber of Commerce Executives reports that there are 4,000 Chambers with at least 1 full-
  time staff person.
\d\ FINRA Industry Snapshot. FINRA reported 3,607 FINRA registered firms in 2018. There were 173 with 500 or
  more registered representatives.
\e\ National Association of Insurance Commissioners.

    One commenter was concerned that the rule would expose pooled 
employer plans to litigation risk. The commenter suggested that this 
would dissuade pooled plan provider from registering and thus, there 
would be fewer pooled employer plans available to small employers. 
While the Department acknowledges this concern, the Department believes 
that the rule will result in a greater availability of workplace 
retirement plans among small employers. By allowing most of the 
administrative and fiduciary responsibilities of sponsoring a 
retirement plan to be transferred to pooled plan providers, pooled 
employer plans provide small employers with the option of providing a 
workplace retirement plan to their employees with reduced burdens and 
costs as compared to sponsoring their own separate single employer 
retirement plan.
3.3. Impact of the Rule
    The Department estimates that it would take the average pooled plan 
provider with a labor rate of $165.63 only 45 minutes to register, at 
an expense of $124.23, because the information necessary is readily 
available through the normal course of business.\44\ Pooled plan 
providers submit the filing only when data elements change, the 
administrator begins or ceases operations for any pooled employer plan, 
or the pooled plan provider undergoes a change. The supplemental filing 
will require an estimated 30 minutes to complete, at an expense of 
$82.82. As with the initial registration, the required information for 
the supplemental filing is readily available. The cost to file both a 
registration and a supplemental filing in a single year would be 
$207.16, which would be less than one percent of revenue if a business 
had more than $20,700 in revenue. The Department lacks complete data to 
determine the number of firms that do not meet this revenue threshold. 
Available data suggests that 15 percent of possibly affected firms have 
less than $100,000 in revenue.\45\
---------------------------------------------------------------------------

    \44\ To register: 0.75 hours per pooled plan provider; 0.75 
hours * $165.63 = $124.23. To update a registration: 0.50 hours * 
$165.63 = $82.82. The total labor rate for a financial manager is 
used as a proxy for the labor rate. Labor rates are EBSA estimates 
found at www.dol.gov/sites/dolgov/files/EBSA/laws-and-regulations/rules-and-regulations/technical-appendices/labor-cost-inputs-used-in-ebsa-opr-ria-and-pra-burden-calculations-june-2019.pdf.
    \45\ Data set supplied by the Small Business Administration 
containing data on the number of firms and revenue by NAICS codes. 
Estimates used NAICS codes 524292, 56133, 523120, 52393, 523130, and 
524113.
---------------------------------------------------------------------------

    To further illustrate how small a $207 burden is, note that a one-
person firm consisting of an individual with a labor rate of $165.63 
would need to work only 125 hours to have revenue of $20,700. That same 
individual working 2,000 hours, a standard work year, would produce 
revenue of $331,260, resulting in $207.16 being significantly less than 
one percent of revenue.
3.4. Duplicate, Overlapping, or Relevant Federal Rules
    The final rule does not conflict with any relevant Federal rules. 
Section 101 of the SECURE Act requires pooled plan providers to 
register both with the Department and with the Treasury Department and 
the IRS. The final Form PR satisfies requirements under both Title I of 
ERISA and the Code. Moreover, the statute expressly authorizes the 
Departments to require reporting of additional information.
4. Unfunded Mandates Reform Act
    Title II of the Unfunded Mandates Reform Act of 1995 requires each 
Federal agency to prepare a written statement assessing the effects of 
any Federal mandate in a proposed or final agency rule that may result 
in an expenditure of $100 million or more (adjusted annually for 
inflation with the base year 1995) in any one year by State, local, and 
tribal governments, in the aggregate, or by the private sector.\46\ For 
purposes of the Unfunded Mandates Reform Act, as well as Executive 
Order 12875, this final rule does not include any Federal mandates that 
the Department expects would result in such expenditures by State, 
local, and tribal governments, or the private sector.\47\ This rule 
simply requires entities that choose to become pooled plan providers to 
register with the Department.
---------------------------------------------------------------------------

    \46\ 2 U.S.C. 1501 et seq. (1995).
    \47\ Enhancing the Intergovernmental Partnership, 58 FR 58093 
(Oct. 28, 1993).
---------------------------------------------------------------------------

5. Federalism Statement
    Executive Order 13132 outlines fundamental principles of 
federalism, and requires that Federal agencies adhere to specific 
criteria when formulating and implementing policies that have 
``substantial direct effects'' on the states, the relationship between 
the national government and states, or on the distribution of power and 
responsibilities among the various levels of government.\48\ Federal 
agencies promulgating regulations that have federalism implications 
must first consult with State and local officials,

[[Page 72955]]

then describe in the preamble to the final rule the extent of their 
consultation and the nature of the officials' concerns.
---------------------------------------------------------------------------

    \48\ Federalism, supra note 7.
---------------------------------------------------------------------------

    This final rule does not have federalism implications because it 
will not have direct effects on the states, on the relationship between 
the national government and the states, or on the distribution of power 
and responsibilities among various levels of government. This final 
rule simply requires private companies that choose to offer pooled 
employer plans to register with the Department.

List of Subjects in 29 CFR Part 2510

    Employee benefit plans, Pensions.

    For the reasons stated in the preamble, the Department of Labor 
amends 29 CFR part 2510 as follows:

PART 2510--DEFINITIONS OF TERMS USED IN SUBCHAPTERS C, D, E, F, G, 
AND L OF THIS CHAPTER

0
1. The authority citation for part 2510 is revised to read as follows:

    Authority: 29 U.S.C. 1002(1), 1002(2), 1002(3), 1002(5), 
1002(16), 1002(21), 1002(37), 1002(38), 1002(40), 1002(42), 
1002(43), 1002(44), 1031, and 1135; Secretary of Labor's Order No. 
1-2011, 77 FR 1088 (Jan. 9, 2012); Sec. 2510.3-101 and 2510.3-102 
also issued under sec. 102 of Reorganization Plan No. 4 of 1978, 5 
App. (E.O. 12108, 44 FR 1065 (Jan. 3, 1979)) and 29 U.S.C. 1135 
note. Sec. 2510.3-38 is also issued under sec. 1, Pub. L. 105-72, 
111 Stat. 1457 (1997).


0
2. Add Sec.  2510.3-44 to read as follows:


Sec.  2510.3-44  Registration Requirement to Serve as a Pooled Plan 
Provider to Pooled Employer Plans

    (a) General. Section 3(44) of the Act sets forth the criteria that 
a person must meet to be a pooled plan provider for pooled employer 
plans under section 3(43) of the Act.
    (b) Registration requirement. Subparagraph (A)(ii) of section 3(44) 
requires the person to register as a pooled plan provider with the 
Department and provide such other information as the Department may 
require, before beginning operations as a pooled plan provider. For 
this purpose, ``beginning operations as a pooled plan provider'' means 
the initiation of operations of the first plan that the person operates 
as a pooled employer plan, as described in paragraph (b)(6) of this 
section. To meet the requirements to register with the Department under 
section 3(44) of the Act, a person intending to act as a pooled plan 
provider must:
    (1) At least 30 days before beginning operations as a pooled plan 
provider, file with the Department the following information on a 
complete and accurate Form PR (Pooled Plan Provider Registration) in 
accordance with the form's instructions.
    (i) The legal business name and any trade name (doing business as) 
of such person.
    (ii) The business mailing address and phone number of such person.
    (iii) The employer identification number (EIN) assigned to such 
person by the Internal Revenue Service.
    (iv) The address of any public website or websites of the pooled 
plan provider or any affiliates to be used to market any such person as 
a pooled plan provider to the public or to provide public information 
on the pooled employer plans operated by the pooled plan provider.
    (v) Name, address, contact telephone number, and email address for 
the responsible compliance official of the pooled plan provider. For 
purposes of this paragraph (b)(1)(v), the term ``responsible compliance 
official'' means the person or persons, identified by name, title, or 
office, responsible for addressing questions regarding the pooled plan 
provider's status under, or compliance with, applicable provisions of 
the Act and the Internal Revenue Code as pertaining to a pooled 
employer plan.
    (vi) The agent for service of legal process for the pooled plan 
provider, and the address at which process may be served on such agent.
    (vii) The approximate date when pooled plan operations are expected 
to commence.
    (viii) An identification of the administrative, investment, and 
fiduciary services that will be offered or provided in connection with 
the pooled employer plans by the pooled plan provider or an affiliate. 
For purposes of this paragraph (b)(1)(viii), the term ``affiliate'' 
includes all persons who are treated as a single employer with the 
person intending to be a pooled plan provider under section 414(b), 
(c), (m), or (o) of the Internal Revenue Code who will provide services 
to pooled employer plans sponsored by the pooled plan provider and any 
officer, director, partner, employee, or relative (as defined in 
section 3(15) of the Act) of such person; and any corporation or 
partnership of which such person is an officer, director, or partner.
    (ix) A statement disclosing any ongoing Federal or State criminal 
proceedings, or any Federal or State criminal conviction, related to 
the provision of services to, operation of, or investments of, any 
employee benefit plan, against the pooled plan provider, or any 
officer, director, or employee of the pooled plan provider, provided 
that any criminal conviction may be omitted if the conviction, or 
related term of imprisonment served, is outside ten years of the date 
of registration.
    (x) A statement disclosing any ongoing civil or administrative 
proceedings in any court or administrative tribunal by the Federal or 
State government or other regulatory authority against the pooled plan 
provider, or any officer, director, or employee of the pooled plan 
provider, involving a claim of fraud or dishonesty with respect to any 
employee benefit plan, or involving the mismanagement of plan assets.
    (2) No later than the initiation of operations of a plan as a 
pooled employer plan, as described in paragraph (b)(6) of this section, 
file with the Department a supplemental report using the Form PR 
containing the name and plan number that the pooled employer plan will 
use for annual reporting purposes, and the name, address, and EIN for 
the trustee for the plan.
    (3) File with the Department a supplemental report using the Form 
PR within the later of 30 days after the calendar quarter in which the 
following reportable events occurred or 45 days after a following 
reportable event occurred:
    (i) Any change in the information reported pursuant to paragraph 
(b)(1) or (2) of this section unless otherwise disclosed pursuant to 
paragraphs (b)(3)(iii) through (v) of this section.
    (ii) Any significant change in corporate or business structure of 
the pooled plan provider, e.g., merger, acquisition, or initiation of 
bankruptcy, receivership, or other insolvency proceeding for the pooled 
plan provider or an affiliate that provides services to a pooled 
employer plan, or ceasing all operations as a pooled plan provider.
    (iii) Receipt of written notice of the initiation of any 
administrative proceeding or civil enforcement action in any court or 
administrative tribunal by any Federal or State governmental agency or 
other regulatory authority against the pooled plan provider, or any 
officer, director, or employee of the pooled plan provider involving a 
claim of fraud or dishonesty with respect to any employee benefit plan, 
or involving the mismanagement of plan assets.
    (iv) Receipt of written notice of a finding involving a claim of 
fraud or dishonesty with respect to any employee benefit plan, or 
involving the mismanagement of plan assets in any matter described in 
paragraph (b)(1)(x) or (b)(3)(iii) of this section.
    (v) Receipt of written notice of the filing of any Federal or State 
criminal

[[Page 72956]]

charges related to the provision of services to, operation of, or 
investments of any pooled employer plan or other employee benefit plan 
against the pooled plan provider or any officer, director, or employee 
of the pooled plan provider.
    (4) Only one registration must be filed for each person intending 
to act as a pooled plan provider, regardless of the number of pooled 
employer plans it operates. A pooled plan provider must file updates 
for each pooled employer plan described in paragraph (b)(2) of this 
section, any change of previously reported information, and any change 
in circumstances listed in paragraph (b)(3) of this section, but may 
file a single statement to report multiple changes, as long as the 
timing requirements are met with respect to each reportable change.
    (5) If a pooled plan provider has terminated and ceased operating 
all pooled employer plans, the pooled plan provider must file a final 
supplemental filing in accordance with instructions for the Form PR. 
For purposes of this section, a pooled employer plan is treated as 
having terminated and ceased operating when a resolution has been 
adopted terminating the plan, all assets under the plan (including 
insurance/annuity contracts) have been distributed to the participants 
and beneficiaries or legally transferred to the control of another 
plan, and a final Form 5500 has been filed for the plan.
    (6) For purposes of this section, a person is treated as initiating 
operations of a plan as a pooled employer plan when the first employer 
executes or adopts a participation, subscription, or similar agreement 
for the plan specifying that it is a pooled employer plan, or, if 
earlier, when the trustee of the plan first holds any asset in trust.
    (7) Registrations required under this section shall be filed with 
the Secretary electronically on the Form PR in accordance with the Form 
PR instructions published by the Department.
    (8) For purposes of this section, the term ``administrative 
proceeding'' or ``administrative proceedings'' means a judicial-type 
proceeding of public record before an administrative law judge or 
similar decision-maker.
    (9) For purposes of this section, the term ``other regulatory 
authority'' means Federal or State authorities and self-regulatory 
organizations authorized by law, but does not include any foreign 
regulatory authorities.
    (10) For purposes of paragraphs (b)(1)(ix) and (x) and (b)(3)(iii) 
and (v) of this section, employees of the pooled plan provider include 
employees of the pooled employer plan, but only if they handle assets 
of the plan, within the meaning of section 412 of the Act, or if they 
are responsible for operations or investments of the pooled employer 
plan.
    (c) Transition rule. Notwithstanding paragraph (b)(1) of this 
section, a person intending to act as a pooled plan provider may file 
the Form PR on or before beginning operations as a pooled plan provider 
(dispensing with the 30-day advance filing requirement) if the filing 
is made before February1, 2021.
    (d) Acquittals and removal of information. A pooled plan provider 
may file an update to remove any matter previously reported under 
paragraph (b)(1)(ix) or (b)(3)(v) of this section for which the 
defendant has received an acquittal. For this purpose, the term 
``acquittal'' means a finding by a judge or jury that a defendant is 
not guilty or any other dismissal or judgment which the government may 
not appeal.

    Signed at Washington, DC.
Jeanne Klinefelter Wilson,
Acting Assistant Secretary, Employee Benefits Security Administration, 
Department of Labor.
[FR Doc. 2020-25170 Filed 11-13-20; 8:45 am]
BILLING CODE 4510-29-P