Final PPP Registration Requirements Arrive at OMB

As the effective date for Pooled Employer Plans (PEPs) nears, the Department of Labor (DOL) is not wasting any time in trying to finalize the corresponding Pooled Plan Provider (PPP) registration requirements.  

According to the White House’s Office of Management Budget website, the DOL submitted a final regulation on the registration requirements to the agency for review on Oct. 23. 

This comes after the DOL published a proposed rule on Sept. 1, with a 30-day comment period. The OMB generally has up to 90 days to vet the final rule and either approve it for release or send it back for modifications, but with the PEP implementation date quickly approaching, the rule likely will be released in the next couple of weeks. 

Enacted in December 2019, the SECURE Act provides that newly permitted PPPs can begin offering PEPs on Jan. 1, 2021, but requires such entities to register with the DOL before beginning operations. The legislation also includes a requirement that the PPP be a named fiduciary of the PEP and must be responsible as the plan administrator. 

While the text of the final registration requirements is not yet available, the proposed rule sought to establish a new Form PR for PPPs to register. In general, the proposed rule calls for:  

• an initial registration filing and supplemental filings to report changes in the initial filing; 
• information about each specific PEP before initiation of operations; and 
• information on specified reportable events—all of which includes time-sensitive knowledge that is important for the DOL, Treasury Department and IRS to carry out oversight and for participating employers to be able to exercise their fiduciary duties of selection and monitoring. 

The proposed rule also requires a final filing once the last PEP has been terminated and ceased operations.

The American Retirement Association submitted a comment letter Oct. 1, raising several concerns with the proposed registration requirements, chief among them that the proposal underestimates the time needed to comply with the registration requirements in advance of Jan. 1, 2021, starting date. The ARA also recommended clarifications in response to what specific information should be reported. 

The near finalization of the PPP registration requirements is the latest in a series of guidance from the DOL in recent weeks, including: 

• a near-final rule to clarify standards on ESG-themed investments; 
• a proposed rule addressing fiduciary duties concerning proxy voting; 
• its reboot of the fiduciary rule, which restored the 1975 five-part test on the conditions for advice to constitute “investment advice” and proposed a new prohibited transaction exemption;  
• an Information Letter that affirmed private equity investments as a component of a professionally managed multi-asset class vehicle structured as a target date, target risk or balanced fund can be offered as an investment option for participants in DC plans under ERISA; and 
• an Interim Final Lifetime Income Disclosure Rule.