In the article "DOL Asks If New 'Pooled' Retirement Plans Must Skirt ERISA," Law360 reports that the U.S. Department of Labor's employee benefits unit is asking companies whether they will need an exemption to the Employee Retirement Income Security Act's self-dealing ban in order to administer a new type of retirement-savings product called a pooled employer plan (PEP). The legal industry publication turned to employee benefits & executive compensation partner Fred Reish for insight into how PEPs will be used.
Reish told Law360 that two dominant business models have emerged so far for PEPs.
In the first, a company whose sole purpose is administering ERISA plans would set up the plan, contracting with other companies for services such as investment advice.
In the second, a large financial institution would set up the plan, providing most or all of the services itself. That type of plan would more likely need a prohibited transaction exemption, Reish said.