Credit: Valery/Adobe Stock
With the focus off the just-passed One Big Beautiful Bill, the Department of Labor is getting down to old business: pooled employers plans (PEPs), as included in a provision in the SECURE 2.0 legislation, which became law in 2023. The DOL has submitted a request for information (RFI) to the White House’s Office of Management and Budget (OMB) on July 7.
Though PEPs, which are administered by pooled plan providers such as The Standard, have been in existence for over 50 years, SECURE 2.0 provisions and the pricing power of pooled structures is prompting more organizations to seek them out instead of 403(b)s or 401(k)s.
SECURE 2.0 amended the Employee Retirement Income Security Act of 1974 (ERISA) to include a PEP as a type of single employer pension benefit plan, and granted the DOL Secretary authority “to issue such guidance as the Secretary determines appropriate to carry out the purposes of the new provisions,” according to the OMB’s regulatory review.
“The Department of Labor’s Employee Benefits Security Administration intends to start by consulting with a diverse set of stakeholders, including employers and employees and their representatives and retirement plan service and investment providers, to explore areas where regulatory or other guidance would facilitate establishment and operation of pooled employer plans.”
PEPs are a compelling option for small and mid-size employers and advisors seeking efficient, cost-effective recordkeeping solutions – and by entering a PEP, the employer reduces its fiduciary responsibilities. However, only about 300 firms have registered with the DOL to sponsor the plans since Congress approved PEPs in late 2019, as part of SECURE 2.0. PEPs surpassed $10 billion in assets in 2024, according to global analytics firm Cerulli Associates.
“SECURE 2.0 has significantly expanded access to pooled employer plans …," said Darren Zino, head of retirement distribution at Transamerica, which offers pooled plan solutions. "Perhaps most notably, it's opened the door for 403(b) plans to participate, which is a significant change for non-profits and educational institutions. We're also seeing clearer guidelines on fiduciary responsibilities, particularly regarding contribution collection.”
Related: Pooled employers plans: Expanding access to 401(k) plans, but low employer buy-in persists
The DOL’s recent RFI will take into account the recently enacted section of SECURE 2.0 of 2022, “which requires the Secretary of Labor to conduct a study on the pooled employer plan industry and, not later than 5 years after the date of enactment, submit to Congress a report on the findings of the study, including recommendations on how pooled employer plans can be improved, through legislation, to serve and protect retirement plan participants,” read the RFI.
There is no timeline for release of the DOL project, however, the OMB has up to 90 days to either approve the RFI or send it back for modification. The DOL would need to complete guidance for PEPs by 2027, as indicated in the SECURE 2.0 provision.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.