In today’s competitive talent landscape, offering your employees a robust retirement plan is no longer a bonus, it’s a necessity. However, the associated administrative burdens and fiduciary responsibility have made managing traditional retirement plans, such as 401k plans, difficult and cumbersome. Thankfully, Pooled Employer Plans (PEPs) have emerged as a game-changer, offering a simplified and cost-effective solution for organizations to provide their employees with a valuable retirement benefit.
1. Professional Fiduciary Responsibility and Oversight: Unlike traditional 401k plans where an organization retains its fiduciary responsibility, being a part of a PEP gives you the significant advantage of transferring that responsibility to a designated Pooled Plan Provider (PPP). This frees organizations from the complexities and liabilities of plan administration, compliance, and investment oversight, allowing them to focus on core operations while safeguarding their employees’ retirement security.
2. Cost-Effectiveness Through Economies of Scale: Traditionally, standalone retirement plans face higher fees due to economies of scale. PEPs challenge this model by pooling plan assets with other organizations and unlocking access to lower administrative costs, investment fees, and recordkeeping expenses. This translates to significant cost savings for organizations while enhancing the value proposition for their employees.
3. Institutional Investment Management: Selecting investments for your organization’s retirement plan is a daunting task fraught with liability. By being a part of a PEP, you have the benefit of working with a 3(38) investment manager and named investment fiduciary. The investment manager assumes responsibility and discretion over your plan’s investment lineup so you don’t have to.
4. Serving Plan Participants: Ensuring that your workforce is on the path to becoming retirement-ready is of paramount importance. Leading PEPs offer robust financial planning tools and provide access to fiduciary financial advisors, features, and services that can help boost participation rates ensuring a larger portion of your workforce is on track for a secure retirement.
Beyond the Core: Customization and Flexibility
Being able to customize your organization’s unique needs is a mainstay of a competitive PEP. This allows you to tailor elements like contribution and matching requirements, as well as communication and participant service strategies to align with your organization’s unique culture and needs. This helps ensure the PEP seamlessly integrates into your existing benefits structure.
A Transformative Opportunity for Forward-Thinking Organizations
PEPs are reshaping the retirement landscape. They offer a simpler, more affordable, and less time-consuming way to provide a valuable employee benefit. If you’re looking to attract and retain top talent while prioritizing long-term financial security for your workforce, exploring a PEP could be a transformative decision for your organization.
To learn more about Smith Bruer United, our Pooled Employer Plan, take a look at this video and connect with one of our team members at (800) 387-3487.
