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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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Department of Labor Adopts Temporary Non-Enforcement Policy for Fiduciary Rule


Time to Read: 1 minutes Practices: ERISA

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On March 10, 2017, the U.S. Department of Labor (the “DOL”) issued Field Assistance Bulletin No. 2017-01, announcing a temporary non-enforcement policy for non-compliance with its fiduciary rule. The non-enforcement policy would apply in two circumstances:

  1. If the DOL’s proposed delay is not finalized until after April 10, the current applicability date for the fiduciary rule, then the DOL will not initiate enforcement actions based on any failure to comply with the rule between April 10 and the date the delay is implemented.
  2. If the DOL does not implement a final delay, then it will not initiate enforcement actions based on noncompliance with the rule and the prohibited transaction exemptions issued alongside the rule, if steps are taken to satisfy the requirements within a reasonable time period after the DOL announces that there will not be a delay.

The non-enforcement policy should provide some comfort to financial institutions that are having difficulty completing preparations for the April 10 compliance date. However, it does not protect institutions from private lawsuits for failure to comply with the rule. In addition, the policy does not eliminate the need to continue working on compliance programs, since the potential relief if the rule is not delayed requires an institution to come into compliance within a “reasonable time period.”

For details on the fiduciary rule, see our Alert; for details on the DOL FAQs, see our Alert on the First FAQ and Alert on the Second FAQ; and for information on the current status of the rule see our Alert on the Presidential Memorandum and Alert on the DOL’s Proposed 60-day Delay

If you would like further information, any member of Ropes & Gray’s ERISA practice group would be happy to discuss the current status of the DOL’s fiduciary rule with you.


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