Pooled Retirement Plans Chilled by Conflict of Interest Concerns

Pooled retirement plans offer a tantalizing new option this year for employers and could boost worker savings, but big providers and others are shying away until federal guidance sorts out potential conflicts of interest such as self-dealing.

Major recordkeepers and U.S. financial institutions vying to corner the market on burgeoning low-cost traditional 401(k)s are conspicuously absent from the U.S. Labor Department’s list of approved pooled plan providers. Meanwhile, some small pooled plan providers have hired themselves to serve as administrators, investment advisers, and recordkeepers for plans—transactions otherwise prohibited under the law, the Labor Department’s provider filing data shows.

Practitioners say ...