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costs associated with an ID/IQ contract,

or portion of a contract. In such cases,

FHWA’s construction contracting

requirements will apply to all ID/IQ

contract work orders if any ID/IQ

contract work orders are funded with

Title 23, U.S.C. funds. Any expenses

incurred before FHWA authorization

shall not be eligible for reimbursement

except as may be determined in

accordance with § 1.9 of this chapter.

(2) The applicable Federal share for

each work order shall be specified in the

relevant project agreement.

§ 635.606 ID/IQ procedures.

(a) FHWA approval. The State DOT

shall submit its proposed ID/IQ

procurement procedures to the Division

Administrator for review and approval.

Following approval by the Division

Administrator, any subsequent changes

in procedures and requirements shall

also be subject to approval by the

Division Administrator before they are

implemented. Other contracting

agencies may follow approved State

DOT procedures in their State or their

own procedures if approved by both the

State DOT and FHWA. The Division

Administrator’s approval of ID/IQ

procurement procedures may not be

delegated or assigned to the State DOT.

(b) Competition. ID/IQ procurement

procedures shall effectively secure

competition in the judgment of the

Division Administrator.

(c) Procurement requirements. ID/IQ

procurement procedures shall include

the following procedures and

responsibilities:

(1) Review and approval of ID/IQ

solicitations;

(2) Review and approval of work item

descriptions and specifications;

(3) Approval to advertise solicitations;

(4) Concurrence with ID/IQ contract

awards to single or multiple contractors;

(5) Approval of and amendments to

formal project agreements and

authorizations to proceed pursuant to

§ 630.106 of this chapter;

(6) Issuance of work orders;

(7) Approval of and amendments to

agreement estimates pursuant to

§ 635.115;

(8) Changed conditions clauses;

(9) Approval of contract changes and

extra work pursuant to § 635.120; and

(10) Other procedures as needed to

ensure compliance with other

requirements in this subpart and under

Title 23, U.S.C. and its implementing

regulations and 49 CFR part 26.

(d) Design-build and ID/IQ. Subject to

the approval of the Division

Administrator, as described in

§ 635.606(a), contracting agencies may

incorporate the design-build contracting

method with ID/IQ contracts. In

addition to the requirements of this

section, the contracting agency shall

include procedures as needed to ensure

compliance with part 636 of this chapter

and related requirements.

[FR Doc. 2020–23675 Filed 11–13–20; 8:45 am]

BILLING CODE 4910–22–P

DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 9909]

RIN 1545–BP35

Limitation on Deduction for Dividends

Received From Certain Foreign

Corporations and Amounts Eligible for

Section 954 Look-Through Exception;

Correction

AGENCY

: Internal Revenue Service (IRS),

Treasury.

ACTION

: Final regulations; correction.

SUMMARY

: This document contains

corrections to the final regulations

(Treasury Decision 9909) that were

published in the Federal Register on

Thursday, August 27, 2020. Treasury

Decision 9909 contained final

regulations under sections 245A and

954 of the Internal Revenue Code (the

‘‘Code’’) that limit the deduction for

certain dividends received by United

States persons from foreign corporations

under section 245A and the exception to

subpart F income under section

954(c)(6) for certain dividends received

by controlled foreign corporations.

DATES

: These corrections are effective

on November 16, 2020.

FOR FURTHER INFORMATION CONTACT

:

Arielle M. Borsos or Logan M.

Kincheloe at (202) 317–6937 (not a toll-

free number).

SUPPLEMENTARY INFORMATION

:

Background

The final regulations (TD 9909) that

are the subject of this correction are

issued under sections 245A, 954(c)(6),

and 6038 of the Internal Revenue Code.

Need for Correction

As published on August 27, 2020 (85

FR 53068) the final regulations (TD

9909) contain errors that need to be

corrected.

Correction of Publication

■Accordingly, the final regulations (TD

9909) that are the subject of FR Doc.

2020–18543, appearing on page 53068

in the Federal Register of August 27,

2020, are corrected as follows:

1. On page 53075, third column,

removing the second and third sentence

of the last full paragraph.

2. On page 53076, first column, the

seventh line from the bottom of the first

full paragraph, after the sentence ending

‘‘See proposed § 1.245A–5(e)(3)(i)(C).’’,

adding the language ‘‘Because the

determination as to whether there

would be an extraordinary reduction

amount or tiered extraordinary

reduction amount greater than zero is

made without regard to an election to

close the taxable year, this

determination is made without taking

into account any elections that may be

available, or other events that may

occur, solely by reason of an election to

close the taxable year, such as the

application of section 954(b)(4) to a

short taxable year created as a result of

the election.’’

3. On page 53076, first column, the

sixth and seventh lines from the bottom

of the first full paragraph, the language

‘‘Because the election can only’’ is

corrected to read ‘‘Furthermore, because

the election to close the taxable year can

only’’.

4. On page 53077, the second column,

the sixth line from the bottom of the

first full paragraph, the language ‘‘under

sections 7805(b)(2)’’ is corrected to read

‘‘under section 7805(b)(2)’’.

5. On page 53078, the first column,

the seventh line of the second full

paragraph, the language ‘‘Earning

subject’’ is corrected to read ‘‘Earnings

subject’’.

6. On page 53082, the third column,

the last line of the bottom partial

paragraph, ‘‘gap period’’ is corrected to

read ‘‘disqualified period’’.

Crystal Pemberton,

Senior Federal Register Liaison, Publications

and Regulations Branch, Legal Processing

Division, Associate Chief Counsel, (Procedure

and Administration).

[FR Doc. 2020–24092 Filed 11–13–20; 8:45 am]

BILLING CODE 4830–01–P

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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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.

3

The SECURE Act was enacted as Division O of

the Further Consolidated Appropriations Act, 2020

(Pub. L. 116–94) (December 20, 2019).

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.

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

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.

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:

•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

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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.

6

ERISA section 3(44)(a)(ii).

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

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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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.

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.

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.

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.

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

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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

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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

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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

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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

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9

85 FR 36880 (June 18, 2020) (titled Prohibited

Transactions Involving Pooled Employer Plans

Under the SECURE Act and Other Multiple

Employer Plans).

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

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.

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

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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).

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.

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).

(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

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.

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.

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

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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.

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.

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

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

§ 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.’’

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

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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.

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

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

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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

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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.

18

Public Law 107–347, sec. 2 (Dec. 17, 2002).

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).

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.

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

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

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2 U.S.C. 1501 et seq. (1995).

26

Federalism, 64 FR 153 (Aug. 4, 1999).

27

Regulatory Planning and Review, supra note 2.

Act of 1995,

25

and Executive Order

13132.

26

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:

(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

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.

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

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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.

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.

38

Pension plans face additional burdens in

terminating, and so using welfare plans termination

rates as a proxy may overstate the number of

incidents.

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; cosby.chris@

dol.gov. 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

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

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

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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.

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.

41

5 U.S.C. 601 et seq. (1980).

42

5 U.S.C. 551 et seq. (1946).

43

Some possible affected industries by NAICS

code are as follows: 524292 third-party

administration, more than 90 percent small

Continued

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.

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

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.

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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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.

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.

46

2 U.S.C. 1501 et seq. (1995).

47

Enhancing the Intergovernmental Partnership,

58 FR 58093 (Oct. 28, 1993).

48

Federalism, supra note 7.

E

STIMATED

P

OOLED

P

LAN

P

ROVIDER

Universe Expected

share

(%)

Estimated

number

Unique Recordkeepers and Plan Administrators for existing DC Plans

a

................................... 2,378 50 1189

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 representa-

tives.

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

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.

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,

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Federal Register / Vol. 85, No. 221 / Monday, November 16, 2020 / Rules and Regulations

then describe in the preamble to the

final rule the extent of their consultation

and the nature of the officials’ concerns.

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

■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).

■2. Add § 2510.3–44 to read as follows:

§ 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

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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

DEPARTMENT OF THE INTERIOR

National Park Service

36 CFR Parts 1 and 13

[NPS–AKRO–30677; PPAKAKROZ5,

PPMPRLE1Y.L00000]

RIN 1024–AE63

Jurisdiction in Alaska

AGENCY

: National Park Service, Interior.

ACTION

: Final rule.

SUMMARY

: This rule revises National

Park Service regulations to comply with

the decision of the U.S. Supreme Court

in Sturgeon v. Frost. In the Sturgeon

decision, the Court held that National

Park Service regulations apply

exclusively to public lands (meaning

federally owned lands and waters)

within the external boundaries of

National Park System units in Alaska.

Lands which are not federally owned,

including submerged lands under

navigable waters, are not part of the

units subject to the National Park

Service’s ordinary regulatory authority.

DATES

: This rule is effective on

December 16, 2020.

ADDRESSES

: The comments received on

the proposed rule are available on

www.regulations.gov in Docket ID: NPS–

2020–0002.

FOR FURTHER INFORMATION CONTACT

:

Donald Striker, Acting Regional

Director, Alaska Regional Office, 240

West 5th Ave., Anchorage, AK 99501.

Phone (907) 644–3510. Email: AKR_

Regulations@nps.gov.

SUPPLEMENTARY INFORMATION

:

Background

Sturgeon v. Frost

In March 2019, the U.S. Supreme

Court in Sturgeon v. Frost (139 S. Ct.

1066, March 26, 2019) unanimously

determined the National Park Service’s

(NPS) ordinary regulatory authority over

National Park System units in Alaska

only applies to federally owned ‘‘public

lands’’ (as defined in section 102 of the

Alaska National Interest Lands

Conservation Act, 16 U.S.C. 3102)—and

not to State, Native, or private lands—

irrespective of unit boundaries on a

map. Lands not owned by the federal

government, including submerged lands

beneath navigable waters, are not

deemed to be a part of the units (slip op.

17). More specifically, the Court held

that the NPS could not enforce a

System-wide regulation prohibiting the

operation of a hovercraft on part of the

Nation River that flows through the

Yukon-Charley Rivers National Preserve

(the Preserve). A brief summary of the

factual background and Court opinion

follow, as they are critical to

understanding the purpose of this

rulemaking.

The Preserve is a conservation system

unit established by the 1980 Alaska

National Interest Lands Conservation

Act (ANILCA) and administered by the

NPS as a unit of the National Park

System. The State of Alaska owns the

submerged lands underlying the Nation

River, a navigable waterway. In late

2007, John Sturgeon was using his

hovercraft on the portion of the Nation

River that passes through the Preserve.

NPS law enforcement officers

encountered him and informed him

such use was prohibited within the

boundaries of the Preserve under 36

CFR 2.17(e), which states that ‘‘[t]he

operation or use of a hovercraft is

prohibited.’’ According to NPS

regulations at 36 CFR 1.2(a)(3), this rule

applies to persons within ‘‘[w]aters

subject to the jurisdiction of the United

States located within the boundaries of

the National Park System, including

navigable waters’’ without any regard to

ownership of the submerged lands. See

54 U.S.C. 100751(b) (authorizing the

Secretary of the Interior to regulate

‘‘boating and other activities on or

relating to water located within System

units’’).

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Published date	16 November 2020
Citation	85 FR 72934
Record Number	2020-25170
Section	Rules and Regulations
Court	Employee Benefits Security Administration,Labor Department

Registration Requirements for Pooled Plan Providers

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