We have submitted our comment to the DOL in response to its RFI on PEPs, including its inquiry as to whether a prohibited transaction exemption will be necessary to the operation of PEPs.
We noted that it is our view that the new PEP rules do not add any new services to the marketplace. Rather, PEPs merely reorganize existing services to be provided in a different format, with the one exception is that it now permits unrelated employers to be able to file a consolidated Form 5500. Further, we believe the Department’s issuance of guidance as to the allocation of these different authorities (consistent with in ERISA Section 3(44)(C) which requires the Department to ‘‘(i) to identify the administrative duties and other actions required to be performed by a pooled plan provider…”) is a required condition precedent to the determination of whether any prohibited transaction exemptive relief is necessary in the operation of a PEP. We encouraged the DOL to amend the 408(b)2 regs and the regs on the allocation of fiduciary authority to specifically apply the in the special circumstances arising under a PEP.