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Pooled Employer Plans (“PEPs”): Putting a little PEP in a 401k retirement plan could help to protect your Portfolio Companies

Set against the backdrop of the continuing wave of ERISA litigation that is being brought against employers who sponsor retirement plans, Pooled Employer Plans (“PEPs”) are emerging in the US retirement plan marketplace as an alternative that may limit employers’ risk of retirement plan-related litigation. There have been over 220 ERISA class action suits filed in connection with retirement plans since 2018, and the top ten ERISA settlements for 2021 alone totaled $840 million in the aggregate. Since ERISA litigation is a serious and relevant concern, many plan sponsors, including private equity sponsors and their portfolio companies, would benefit from evaluating whether a PEP is a viable retirement plan solution for them.

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Amendments to HSR Pre-Merger Notification Requirements to Take Effect February 28, 2008


Time to Read: 1 minutes Practices: Private Equity

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The Federal Trade Commission has announced revised jurisdictional and filing fee thresholds for the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. This is an annual adjustment to the size-of-transaction, size-of-persons, and filing fee thresholds based on changes in the gross national product. The revised thresholds apply to transactions closing on or after February 28, 2008.

The HSR Act and the related rules require the parties to a significant acquisition of voting securities, assets or non-corporate interests to file notification forms with the federal antitrust enforcement authorities and to wait for a defined period prior to completing the acquisition. Substantial civil penalties may be incurred if covered transactions are consummated without a filing or before the waiting period has expired or been terminated.

Although there are changes throughout the Act, including to the size-of-person test and the limitations contained in the exemptions for the acquisition of foreign assets and voting securities, the amendment affects private equity funds primarily as follows:

• Increased Size-of-Transaction Test – The size-of-transaction test will increase from $59.8 million to $63.1 million of voting securities, assets or non-corporate interests of the acquired person.
Revised Filing Fees – The filing fees paid by acquiring persons based upon the value of the voting securities, assets or non-corporate interests being acquired will be revised as follows:

                                    Value of Transaction                                             Fee

                $63.1-$126.2 million (formerly $59.8-$119.6 million)                  $45,000
                $126.2-$630.8 million (formerly $119.6-$597.9 million)             $125,000
                $630.8 million or more (formerly $597.9 million or more)           $280,000

Contact Information
To discuss the amendment and its impact on private equity funds, please call or email your regular Ropes & Gray attorney, or contact Cary Armistead, Tom Susman, or Jane Willis of our Antitrust Department.

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