The staff in the Securities and Exchange Commission’s Divisions of Investment Management and Corporation Finance issued guidance recently to address questions about federal securities laws and pooled employer plans for retirement.
In 2019, Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act that established PEPs and enabled multiple small businesses to band together to provide employees with access to high-quality, low-cost retirement plans. PEPs allow multiple, unrelated employers to join a single retirement plan helping to reduce some of the costs, administrative burdens and potential liability.
The SEC’s most recent guidance from the Division of Investment Management says SEC staff will not object to PEPs using existing exemptions to tax-qualified ERISA retirement plans, while the Division of Corporation Finance said PEPs may use a Form S-8 registration statement if employers choose to offer employees securities as part of these plans.
“Commission staff has made it easier for Main Street employees to invest their retirement savings on Wall Street,” SEC Commissioner Mark T. Uyeda said. “By providing straightforward guidance on pooled employer plans and related structures, we are helping sponsors and service providers navigate their obligations with confidence. Regulatory clarity strengthens markets, supports innovation, and ultimately expands access to retirement options for workers across the country. The SEC continues its efforts to support small businesses and President Trump’s agenda to strengthen retirement opportunities for American workers.”
Staff members said the actions and guidance should help PEP sponsors, providers and participants as they seek to use the pooled investment vehicles.