Labor Agency Says Pooled 401(k) Employers Can Shed Liability (1)

The US Labor Department is giving employers that join pooled 401(k) plan arrangements opportunities to reduce fiduciary risks.

Companies that offer pooled employer plans can shift the duties of selecting and retaining a plan’s investment manager off of participating employers to themselves or a named co-fiduciary, DOL’s Employee Benefits Security Administration said in guidance it issued Monday.

Pooled employer plans Congress enacted in 2019 are structured so that investment management duties are defaulted to participating employers. Pooled plan providers must expressly delegate those obligations to another fiduciary.

PEPs can reduce the cost and regulatory burden associated with sponsoring a workplace ...