DOL Requests Public Input on Backing PEPs for Small Employers
The U.S. Department of Labor (DOL) is soliciting help on how to support small plan employers wanting to incorporate pooled employer plans (PEPs).
The DOL on Monday announced that its Employee Benefits Security Administration (EBSA) subagency is pursuing input from the public on how to help small employers offer high-quality, low-cost retirement plan benefits.
RELATED – Employee Fiduciary Urges DOL to Nix PEP Safe Harbor
The request for information from EBSA contains interpretive guidance on PEPs and seeks comments on pooled employer plan market practices, with the overarching aim to create a potential regulatory safe harbor or safe harbors that “encourage market participants to offer [PEPs] and employers to join such plans.”
Developing regulation would reduce investment costs for workers saving for retirement and support recruitment practices for small employers wanting to offer attractive benefits to potential hires, the DOL states.
The efforts are pursuant of a larger aim by the federal government to provide emergency price relief due to increasing inflation.
“The Department of Labor remains committed to helping American workers save for a secure retirement. This request for information is a key step toward identifying ways to help smaller employers lower costs and improve retirement outcomes for their employees,” said Deputy Secretary of Labor Keith Sonderling.
While PEPs were first introduced in the passage of the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, the DOL notes that small employers may not be aware of the regulation due to its relatively new status.
“The Department hopes to address challenges such as these which may impede small employers from taking advantage of PEPs. In addition to promoting retirement savings and reducing participant costs, expanding the use of PEPs is aligned with the Department’s broader economic goals, including improving job quality and increasing labor force participation, especially at small businesses,” the DOL reported.
Studies have shown that those who incorporate PEPs report feeling pleased with their retirement plan. Research from The Standard found that 83% of employers expressed satisfaction with their PEP experience, with a 26% increase in satisfaction after joining the PEP. Employers were keen on the plan’s ease of management and its cost savings.
The request for information will be posted on the DOL’s website and is now published in the Federal Register. The public will have 60 days from the time of publishing in the Federal Register to submit comments. The DOL has also included instructions on how members of the public can send their comments in.
SEE ALSO:
Half of New Retirement Plan Adopters Opt for Pooled Plans
PEP Adoption Skyrockets Employer Satisfaction with Their Advisor, Retirement Plan
Principal Partners with FuturePlan to Meet Rising PEP Demands
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.
