Group of Plans or Defined Contribution Group Plans

ERISA consultants at the Retirement Learning Center (RLC) Resource Desk regularly receive calls from financial advisors on a broad array of technical topics related to IRAs, qualified retirement plans and other types of retirement savings and income plans, including nonqualified plans, stock options, and Social Security and Medicare.  We bring Case of the Week to you to highlight the most relevant topics affecting your business.  

A recent call with a financial advisor from New York is representative of a common inquiry related to types of retirement plans. The advisor asked: “Are there any new plan types for 2022?”

Highlights of Discussion 

Yes, there is. Thanks to The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, Pub. L. 116–94, effective for the 2022 plan year the industry now has Groups of Plans (GoPs) (a.k.a., Defined Contribution Group Plans).  Technically, it is a simplified mechanism for filing a single Form 5500 information return for a collection of defined contribution plans that have the same  

• Trustee,  

• Named fiduciary (or named fiduciaries),  

• Plan administrator,  

• Plan year, and  

• Investment options.   

If you are thinking Multiple Employer Plan (MEP) or Pooled Employer Plan (PEP), think again.  Generally, MEPs and PEPs allow more than one employer to participate in a single retirement plan. In contrast, GoPs allow several employers each with their own defined contribution plan to file a single Form 5500 for the collection of plans, if they have the same trustee, named fiduciary, administrator, plan year and investment options.

While the industry received some information on GoPs in the Department of Labor’s (DOL) proposed Form 5500 changes released in September 2021, more was anticipated in the DOL’s final Form 5500 regulations and news release issued December 29, 2021. Unfortunately, none was present—just a promise that the consolidated filing option for certain groups of defined contribution retirement plans would be the subject of one or more later final notices.  

Conclusion

The SECURE Act created a consolidated Form 5500 filing option for GoPs beginning with the 2022 plan year. The devil is in the details, as they say, and the industry anxiously awaits them.