SEC Guidance on Pooled Employer Plans: Key Securities Law Questions Addressed

On May 4, 2026, the SEC Divisions of Investment Management and Corporation Finance issued guidance regarding its treatment of Pooled Employer Plans (PEPs).

Why This Guidance Matters

Congress created PEPs under the SECURE Act of 2019 to allow multiple, unrelated employers (including self-employed individuals) to offer tax-qualified retirement plan benefits to their employees through a single defined contribution retirement plan (such as a 401(k) plan) provided and maintained by a third party “pooled plan provider.” Prior to the SECURE Act, single retirement plans covering employees of more than one employer generally were permitted only where the participating employers were considered a single-employer (such as a parent and its subsidiaries) or the plan was established and controlled by the group of participating employers or by a union representing the employees of such employers.

Through a PEP, employers may participate in a group 401(k) or similar plan without having to take on the administrative and fiduciary burdens of sponsoring and maintaining their own single-employer plans (or a plan for a group of employers) or participating in a union plan. Instead, those are the responsibilities of the PEP pooled plan provider.

Since the SECURE Act, however, uncertainty has persisted under federal securities laws, particularly with respect to (i) whether PEP trusts could rely on the “single trust exclusion” under Section 3(c)(11) of the Investment Company Act to avoid being regulated as investment companies and (ii) whether PEPs covering “self-employed individuals” could access collective investment trusts (CITs) without securities registration in accordance with Rule 180 under the Securities Act of 1933.

This guidance arrives amid a broader push by the Trump administration to expand retirement plan access. On April 30, 2026, President Trump signed an executive order establishing TrumpIRA.gov, directed at reaching the roughly 56 million Americans­—including self-employed workers and small business employees—who lack employer-sponsored retirement plans. The Department of Labor (DOL) has also proposed a process-based ERISA safe harbor for fiduciaries selecting alternative investment options in defined contribution plans. The SEC guidance complements these parallel initiatives by resolving longstanding securities law barriers specific to PEPs.

The “Single Trust Exclusion”

Section 3(c)(11) of the Investment Company Act excludes certain employee profit-sharing and pension trusts from the definition of “investment company,” provided they meet certain tax-code requirements. Employee benefit plans frequently rely on this exemption to avoid investment company registration and the associated compliance obligations. Section 3(a)(2) of the Securities Act contains a parallel exemption for the same types of trusts.

Historically, SEC Staff has interpreted the single-trust provisions in both statutes to apply to the following types of trusts: (i) trusts for employees of a single-employer; (ii) trusts for employees of employers so closely related as to be regarded as a single-employer (such as a parent and its subsidiaries); and (iii) trusts established and controlled by employers and/or a union representing the employees of such employers.

Because PEPs are expressly designed to pool multiple, unrelated employers, they do not fit neatly under any of these categories. In its guidance, however, SEC Staff stated that it will not object if a PEP treats itself as a single-employer plan for purposes of section 3(c)(11). As a result, a PEP may rely on the single trust exclusion to avoid investment company registration provided it is (i) subject to ERISA; and (ii) meets the applicable requirements under section 401 of the Internal Revenue Code.

Rule 180 and Access to Collective Investment Trusts

CITs are pooled investment vehicles sponsored and maintained by a bank or trust company. Generally offering lower fees and higher flexibility, CITs are considered cost-effective alternatives to mutual funds for retirement plans. Many retirement plans offer CITs as investment options.

In reliance on the exemption under section 3(a)(2) of the Securities Act, CITs do not typically register their interests. That exemption, however, is unavailable for plans covering self-employed individuals, requiring CITs to instead rely on Rule 180.

Rule 180 exempts interests in a CIT issued to a plan covering self-employed individuals from registration only if (among other conditions): (i) the plan covers employees of a single-employer or interrelated partnerships; and (ii) the issuer has reasonable grounds to believe that the employer has adequate knowledge and experience in financial and business matters to represent the interests of the employer and its employees (the “sophistication requirement”).

These conditions effectively excluded self-employed individuals from PEPs that invest in CITs or pressured CIT sponsors to exclude them altogether. The SEC guidance addresses this problem directly. Staff stated that it will not object if a CIT relies on Rule 180 when issuing interests to a PEP that covers self‑employed individuals, provided the PEP is subject to ERISA and satisfies the remaining Rule 180 conditions. Critically, the guidance clarifies that the Rule 180 sophistication analysis may be applied to the pooled plan provider rather than to each participating employer.

The Bottom Line

The SEC Staff has confirmed that, for purposes of key registration exemptions under the federal securities laws, PEPs may generally be treated as single-employer plans. This guidance, issued just days after President Trump’s April 30 executive order targeting the retirement coverage gap, reflects a coordinated, cross-agency effort to expand retirement plan access for small businesses and self-employed workers. Together with the DOL’s pending safe harbor proposal on alternative investments in defined contribution plans, the SEC’s PEP guidance signals that the current administration views reducing regulatory friction (not adding it) as the primary tool for broadening retirement security. PEP participating employers, pooled plan providers and CIT sponsors should take note: the window for PEP growth has materially widened.

Press Release, SEC, SEC Divisions of Investment Management and Corporation Finance Issue Staff Guidance Supporting Retirement Plans for Small Businesses (May 5, 2026), .

It should be noted that employers also may utilize SEP-IRA programs under Internal Revenue Code Section 408(k) to minimize administrative and fiduciary responsibilities, but such programs do not provide the same flexibility as a 401(k) plan. For example, SEP-IRAs permit only employer contributions, require broad participation and same percentage contributions for all employees and require full and immediate (100%) vesting of all plan accounts.

Promoting Retirement-Savings Access for American Workers by Establishing TrumpIRA.gov, Exec. Order No. 14,403, 91 Fed. Reg. 24,329 (Apr. 30, 2026), ; Kathryn Mayer, President Trump Signs Executive Order Expanding Workers’ Retirement Access, Society for Human Resource Management (May 1, 2026), .

Press Release, U.S. Dep’t of Labor, US Department of Labor Proposes Landmark Rule to Democratize Access to Alternative Investments in 401(k) Plans (Mar. 30, 2026), .

15 U.S.C. § 80a-3(c)(11); plans must also meet certain requirements under section 401 of the Internal Revenue Code.

Statement, SEC Division of Investment Management, Staff Statement Regarding Pooled Employer Plans (May 4, 2026), .

See 26 U.S.C. § 401.

CIT 101: What is a Collective Investment Trust?, Great Gray Trust Co. (Sept 17, 2024), .

See 17 C.F.R. § 230.180.

17 C.F.R. § 230.180(a)(2).

17 C.F.R. § 230.180(a)(3).