A Comprehensive Guide for Employers Navigating (PEP)s

February 1, 2024

Navigating Pooled Employer Plans (PEPs): A Comprehensive Guide for Employers

In the evolving landscape of retirement planning, Pooled Employer Plans (PEPs) have emerged as a significant boon for employers, particularly small and mid-sized businesses. These innovative arrangements allow unrelated employers to pool their resources by participating in a single, collective retirement plan. The primary allure of PEPs lies in their ability to offer enhanced plan options, reduced administrative burdens, and potentially lower costs, all of which are crucial factors in the competitive employment market.

Understanding PEPs

At its core, a PEP is a type of multiple-employer plan (MEP) that does not require the participating employers to share a common characteristic or association. This flexibility opens the doors for a wide array of businesses to benefit from economies of scale that were previously accessible only to larger corporations. By aggregating the assets of multiple employers, PEPs can negotiate lower investment fees, access a broader range of investment options, and streamline plan administration.

Administrative Ease and Reduced Liability

One of the most compelling advantages of PEPs is the reduction in administrative responsibilities and fiduciary liabilities for participating employers. In a PEP, a designated Pooled Plan Provider (PPP) assumes the role of the plan administrator and fiduciary, managing the day-to-day operations and compliance requirements of the plan. This shift not only alleviates the administrative burden on employers but also mitigates their fiduciary risk, allowing them to focus on their core business activities.


The collective bargaining power of PEPs can lead to significant cost savings for employers. The aggregation of assets under one umbrella plan enables participants to benefit from lower asset-based fees. Furthermore, the shared cost of administrative services, audit fees, and recordkeeping can make PEPs an economically attractive option for small and medium-sized enterprises (SMEs) that might otherwise find sponsoring a retirement plan prohibitively expensive.

Attracting and Retaining Talent

In today's competitive job market, offering a robust retirement plan is a key differentiator for employers aiming to attract and retain top talent. PEPs enable smaller employers to offer retirement benefits that are competitive with those provided by larger corporations, thereby enhancing their attractiveness as employers. The comprehensive nature of PEPs, including professional management and a wide array of investment options, can significantly enhance the perceived value of an employer's benefits package.

Flexibility and Customization

Despite being part of a pooled arrangement, employers can still customize certain aspects of their participation in a PEP to suit their specific needs and preferences. This can include eligibility criteria, contribution rates, and investment line-ups, among other features. Such flexibility ensures that employers do not have to compromise on their unique requirements while still benefiting from the advantages of pooling.

Regulatory Compliance and Governance

PEPs are subject to regulatory oversight and must comply with the relevant provisions of the Employee Retirement Income Security Act (ERISA). The PPP, as the plan's named fiduciary, is responsible for ensuring that the PEP adheres to all regulatory requirements, further reducing the compliance burden on participating employers.


For employers navigating the complexities of offering competitive retirement benefits, Pooled Employer Plans represent a compelling solution. By leveraging the collective strength of multiple businesses, PEPs provide a pathway to offering a high-quality retirement plan that can attract and retain talent, reduce administrative burdens, and manage costs effectively.

Our PEP solution is designed to encapsulate all these benefits, providing a streamlined, cost-effective, and comprehensive retirement plan option for employers. By partnering with us, you gain access to a retirement plan solution that is not only aligned with the latest industry standards but also tailored to meet the unique needs of your business and your employees.

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