Pooled Employer Plans (PEP): Moving into the New Era of Retirement Plans

Jennifer Swets, ERPA, QPA Partner Consultant at DWC Retirement

Tim Werner, JD, AIF, APM- PRESIDENT and GENERAL COUNSEL at Bluestar Retirement

Jeff M. Atwell, Principal at TRG Fiduciary Services, LLC

June 10, 2021

The new year has brought great news for small business owners and their employees, as well as for savvy, quick acting asset management firms. As of January 1, 2021, the Setting Every Community Up for Retirement Enhancement (SECURE) Act came into effect, giving small businesses and their employees the opportunity to offer and participate in employer-sponsored 401(k) retirement plans that are pooled with other small businesses. Unlike Multiple Employer-Pooled (MEP) plans, PEPs do not require pooled employers to be in the same industry.  Pooled Employer Plans (PEPs) are a new, unique opportunity for asset managers to potentially gather and grow assets and differentiate themselves. Although they have the potential to give small businesses several advantages over a traditional 401(k) offering, there are several key roles that need to filled and providers will be subjected to a greater fiduciary commitment. There was an heightened interest leading up to the deadline, and now that we have passed January 1st, 2021 and registered Pooled Plan Providers can begin to offer PEP’s, it is important to evaluate and learn from early trends we are seeing emerge and from across the provider perspectives.

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