Have Your Clients Considered a PEP Yet?

Sep 07, 2021

Although initially created to help small businesses, many employers with traditional, standalone retirement plans are now “diving in” to pooled employer plans (PEPs). As this new retirement plan option grows in popularity, are you asking your clients and prospects if they have considered a PEP?

PEP Benefits for Employers

A PEP provides employers a way of offering employees a workplace retirement savings option with reduced burdens and costs, according to acting Assistant Secretary of Labor Jeanne Klinefelter Wilson.¹  

Because the Pooled Plan Provider (PPP) is responsible for ensuring the PEP meets the requirements of ERISA and the tax code, employers can minimize the time spent on managing the plan and reduce the chances of an operational or fiduciary misstep.
 

PEP Benefits for Advisors 

Advisors who were once skeptical of PEPs are now considering adding these plans to their book of business because of the benefits for their clients—and their practice. Advisors who work with a single or limited number of PEPs can streamline their practice. Here’s how:

• Plan design discussions become more efficient when using the same PEP document with multiple employers.
• Working with one set of onboarding and service teams reduces the number of contacts made and time spent on each plan.
• Allows more time to focus on working with plan participants and supporting employers rather than troubleshooting problems with various recordkeepers and service providers.
• The PEP’s 3(38) investment manager takes on the burden of preparing investment reports. Advisors still have the option to deliver investment reviews to their plan sponsor clients, but will free up time by using the investment reports generated by the 3(38).

Types of employers who are good candidates for a PEP

Employers of all sizes can be candidates for a PEP, as well as employers that already sponsor a plan. A more important factor is the employer’s objective. For example, employers that want to outsource most of their fiduciary and administrative responsibilities are prime candidates.
 
Talk to your plan sponsor clients and prospects about PEPs if they:

• Want to begin offering a retirement plan, but want to limit expense, fiduciary liability and time commitment in running the plan
• Sponsor an existing plan and are looking to lower costs and outsource many of the fiduciary responsibilities to an expert
• Want a turnkey solution without having to customize documents and plan features
• Are facing state-mandated retirement plan deadlines and need an alternative to a state-run plan 

They will need to understand the benefits of this type of plan. They also must know the factors to consider when selecting and monitoring plan features and providers to help them make informed decisions that are best for their business and employees.

Newport Secure Retirement PEP

If you do not offer your own PEP, consider the Newport Secure Retirement PEP. It’s designed for advisors who want to offer a complete, yet affordable, retirement solution to existing and new clients. Watch our video or read our digital brochure to learn more about the features and benefits of this exciting retirement plan option for your business.

Find out more or request a proposal.