The U.S. Department of Labor (DOL) has released a final ruling, to be effective September 30, regarding association retirement plans (ARPs). This will allow small businesses to join together to provide their employees defined benefit retirement plans. Under the rule, ARPs can be offered by a certain industry nationwide or by an association of various employers in a specific city, county, state, or multi-state metro area. Professional Employer Organizations (PEOs) also can sponsor the plans. According to the DOL, “the rule enables small businesses to offer benefit packages comparable to those offered by large employers.”
July 31st the U.S. Department of Labor (DOL) released the final Prohibited Transaction Exemption (PTE) to Retirement Clearinghouse (RCH) for the RCH Auto Portability program, completing the regulatory framework required for its adoption.
The PTE, was originally proposed by the DOL in November 2018. Now finalized, the PTE establishes important “guardrails” for Auto Portability.
About Auto Portability
Auto portability is the routine, standardized and automated movement of an inactive participant’s retirement account from a former employer’s retirement plan to their active account in a new employer’s plan. Conceived and developed by Retirement Clearinghouse, auto portability is designed to curb unprecedented levels of cash out leakage, dramatically improve participant outcomes, and to work within the established framework of an automatic rollover program in the qualified employer plan system.
Related LIMRA Research: DConversations - Automatic Portability: A New Approach to Addressing Retirement Plan 'Leakage'