SECURE 2.0 Retirement Reforms Enhance Pooled Employer Plan Market

SECURE Act 2.0 has made pooled employer plan arrangements more flexible and easier to administer. The original SECURE Act expanded pooled plan arrangements, but SECURE 2.0 expands flexibility and provides more options. Below are some of the highlights:

• 403(b) plans – SECURE 2.0 permits non-profits and educational institutions to be a part of a multiple employer plan or a pooled plan arrangement, effective for plan years beginning after Dec. 31, 2022. These employers get relief from the “One Bad Apple” rule. In addition, 403(b) plans may now include collective investment trusts (CITs) as investment options.
• Pooled employer plans may designate a named fiduciary (other than an employer in the plan) to be responsible for collecting contributions to the plan and require such fiduciary to implement appropriate procedures, effective for plan years beginning after Dec. 31, 2022. Previously, it was unclear who owned the task of collecting contributions.
• Group of plans will no longer be subject to an overall audit. Rather, the audit is based on each plan and the number of participants in the plan, effective immediately. Previously the Department of Labor proposed that an overall audit may be required.
• Start-up credits are available for employers who join a MEP or PEP. The original SECURE Act was not clear on start-up credits for employers who joined a MEP or PEP. SECURE 2.0 provides clarity and makes this credit retroactively effective beginning with taxable years after Dec. 31, 2019.

In addition, SECURE 2.0 directs the Secretary of the Department of Labor to conduct a study of the pooled plan industry.  The report must be completed within five years of the act and a new study completed every five years after the initial report.

Overall SECURE 2.0 has moved the retirement industry forward and enhanced pooled plan arrangements.

Ameritas retirement plans is a main street market leader that is strong in core markets and specialized in niche markets, making us a preferred provider in the pooled plan space. We offer personalized products and platforms, high touch service, high tech capabilities and more than 60 years of retirement plan experience.

Note: Read this summary of SECURE Act 2.0 for broader information about this retirement reform legislation.

Information provided is gathered from sources believed to be reliable; however, we cannot guarantee their accuracy.

John T. Webb
MBA, ERPA, QKA, QPA, TGPC, CPFA, ASRI
Vice President of Compliance
Retirement Plans