Established as part of 2019’s SECURE Act as a way to help more people prepare for retirement, and as a way to make it easier for business owners to offer their employees 401(k) plans, Pooled Employer Plans, or PEPs, enable unrelated employers to participate in a single, shared defined contribution plan. Pooled Employer Plans represent the first significant new retirement plan related legislation in over a decade.
If you’re the owner of a small, medium, or large-sized business who is interested in offering your employees a 401(k) plan, or if you already have a plan, and would like more simplicity and reduced liability, then adopting a PEP could be ideal for you. PEPs allow two or more unrelated employers, even employers from entirely different business sectors and industries who share no common interests, to participate in a 401k plan offering more commonly only available to larger plans.
The PEP is attractive to companies who are interested in simplified administration, reduced liability, and the possibility of reducing the costs associated with running a 401(k) plan. When companies choose to participate in a PEP, they are given the unique ability to offload many of their administrative duties, as well as most of their fiduciary liability to the sponsor of the PEP. In addition, the PEP offers the potential for reducing total plan fees as a result of the economies of scale that can be achieved in a PEP.
Employers can start adopting the PEP in January of 2021.
Are you a small, medium, or large-sized business owner or HR professional who is interested in learning how a Pooled Employer Plan can help you attract and retain top talent, while helping the people who make your business run prepare for their own retirements?
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1The NBRI Circle of Excellence Award is bestowed upon NBRI clients meeting one or both of the following criteria: Total Company score at or above the 75th percentile of the NBRI ClearPath Benchmarking Database and/or improvement of five (5) or more benchmarking percentiles in Total Company score over the previous survey.
2Scott Hanson (2011, 2012, 2013, 2014, 2015 & 2016) and Pat McClain (2012, 2013, 2014, 2015 & 2016). Barron's© magazine is a trademark of Dow Jones L.P. The ranking reflects the volume of assets overseen by the advisors and their teams, revenues generated for the firms and the quality of the advisors' practices.
3As of 12/20, Allworth Financial, an SEC registered investment adviser and AW Securities, a registered broker/dealer have approximately $10 billion in total assets under management and administration.
4Barron’s 2020 Top 100 RIA Firms. Barron's© magazine is a trademark of Dow Jones L.P. The ranking reflects the volume of assets overseen by the advisors and their teams, revenues generated for the firms and the quality of the advisors' practices.
✢Scott Hanson, Investment Advisor 2005, 25 most influential people in the financial services industry. The ranking reflects 25 people who Investment Advisor magazine believes have had or will have the greatest influence on the financial services industry.
✼Pat McClain, InvestmentNews 2014, Invest in Others Community Service Award, presented to an advisor who has made an outstanding impact on a community through managerial contributions to a non-profit organization.
†Financial Times, FT 300 Top Registered Investment Advisers, June 2019. The ranking reflects six areas of consideration including the company's years in existence, industry certifications of key employees, AUM, asset growth, SEC compliance record and online accessibility and calculates a numeric score for each company.
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