The Advisors' Blog

Here’s something Dave shared yesterday on TheCorporateCounsel.net about an announcement by the Division of Investment Management:

The SEC’s Division of Investment Management and Division of Corporation Finance recently provided guidance regarding the federal securities implications of pooled employer plans (also known as “PEPs”), which are defined contribution retirement plans that permit multiple, unrelated employers to join together in a single plan. These types of plans can be particularly attractive for small businesses seeking to provide retirement plan benefits to employees.

In its Staff Statement Regarding Pooled Employer Plans, the Division of Investment Management provided its views regarding the applicability of the “single trust exclusion” in Section 3(c)(11) of the Investment Company Act to pooled employer plans, as well as the applicability of Securities Act Rule 180 to interests in collective investment trusts maintained by a bank and issued to those pooled employer plans that cover self-employed individuals.

In parallel, the Division of Corporation Finance updated its Corporation Finance Interpretations (CFIs) to address two interpretive issues relating to pooled employer plans. In new Securities Act Sections CFI Question 118.01, the Staff states:

Question: Are pooled employer plans (“PEPs”) eligible to claim the Section 3(a)(2) exemption for any interest or participation in a “single trust fund”?

Answer: The staff will not object if a PEP that meets the qualification requirements of ERISA and Section 401 of the Internal Revenue Code and otherwise meets the conditions of Section 3(a)(2) claims the Section 3(a)(2) exemption for any interest or participation in a “single trust fund” even though multiple, unrelated employers participate in the PEP. As with any plan that meets the exemption in Section 3(a)(2), the offers and sales of any securities in connection with the PEP are subject to the anti-fraud provisions of the Securities Act. See Section 17(c). In addition, the exclusion in Section 3(a)(2) for investments in employer securities would apply. Therefore, if a participating employer offers its own securities to its employees as an investment option in a PEP, the Section 3(a)(2) exemption would not be available for the plan interests offered to the employees of that employer. Please refer to Securities Act Forms CFI [126.45] regarding the availability of Form S-8 to register the offer and sale of an employer’s own securities and the plan interests in connection with a PEP at https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/securities-act-forms. For the views of the staff of the Division of Investment Management regarding the application of section 3(c)(11) of the Investment Company Act of 1940 and rule 180 under the Securities Act to PEPs, see here.

Further, in new Securities Act Forms CFI Question 126.45, the Staff states:

Question: An employer participant in a pooled employer plan (“PEP”) offers its own securities to its employees as an investment option in the PEP, such as by offering an employer securities fund in which employee contributions may be invested. May the employer use Form S-8 to register the offers and sales of those securities? If so, must the PEP also register the offer and sale of plan interests on that form?

Answer: An employer participant in a PEP may register on Form S-8 offers and sales of its own securities to eligible employees. In addition, the PEP must register the offer and sale of plan interests to the employees of that employer on the same Form S-8. Along with the employer registrant’s signatories, the PEP’s trustees or other persons who administer the PEP must sign the Form S-8 for the plan. See Instruction 1 as to Signatures on Form S-8.

Alternatively, the staff will not object if the employer files a Form S-8 to register the offering of its securities to its employees and the PEP separately files its own Form S-8 to register plan interests offered and sold by the PEP to the employer’s employees, as long as the employer, in addition to incorporating its own periodic reports, incorporates the PEP’s periodic reports by reference into its Form S-8. If filing a separate Form S-8:

• The PEP should register an indeterminate amount of plan interests in accordance with Rule 416(c).
• The staff will not object if the PEP applies Rule 457(h)(2) by analogy and does not pay a fee for the registration of the offer and sale of the plan interests as long as the PEP includes a reference to the employer’s related Form S-8 by name and file number and provides a hyperlink to the filing.
• The PEP’s Form S-8 need only incorporate the documents related to the plan in order to comply with Item 3.
• The employer and the PEP must ensure that investors receive all of the information constituting a Section 10(a) prospectus pursuant to Rule 428 and that such information is updated in accordance with General Instruction G of Form S-8.
• The staff will not object if a PEP registers plan interests offered and sold to employees of multiple employers on a single Form S-8 as long as each employer’s separate Form S-8 is referenced and hyperlinked. [May 4, 2026]

With this guidance, the Staff has addressed some questions that have come up since Congress enacted the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.

– Meredith Ervine