Are PEPs the next frontier for employer retirement plans?

Learn more about this latest addition to an important employee benefit by viewing this free, on-demand webinar

Offering your employees benefits makes you competitive. But providing benefits can be expensive and complicated to manage. Are you a small business trying find top talent? Is it a struggle to afford the benefits – like a 401K for employees – that candidates expect? The Minnesota Chamber and Securian Financial formed a strategic alliance to offer high-quality, affordable solutions to help you compete. Pooled Employer Plans (PEPs) are retirement plans that bring down cost by allowing multiple employers to participate. These plans help streamline administration and allow for better investment access for smaller businesses that was previously only achievable for large-scale employers.

SECURE Act
The Setting Every Community Up for Retirement Enhancement Act that passed in late 2019 is the first significant retirement plan related legislation in more than a decade and is intended to help strengthen retirement security across the country. A key provision of the act allows employers to offer a retirement plan through a PEP, which should make it easier for small to midsized businesses to set up and administer a plan for their employees.

What is a Pooled Employer Plan (PEP)?
A PEP is a type of retirement vehicle that is maintained as a single plan while allowing multiple unrelated employers to participate, achieving economies of scale typically only attained by larger plans. It operates similar to traditional 401(k) retirement programs but with the majority of administrative and fiduciary duties outsourced to the pooled plan provider.

PEP benefits
Sponsoring a retirement plan often takes specialized knowledge and adds time-consuming administrative and fiduciary obligations to an employer’s already busy workload. A PEP can help employers stay focused on their business and mitigate fiduciary risk.

• Assurance that fiduciary responsibilities are met and the plan is compliant
• Economies of scale allow for better pricing and investment access
• Single 5500 and audit for all adopting employers
• Protection of plan assets
• More time to focus on business needs

Characteristics of good candidates
Whether you already have an existing 401(k) plan or are looking to offer one to your employees, joining a PEP could be beneficial for many employers and especially if you can relate to the following characteristics. 

• Stretched resources with a need to offload work
• Risk averse with desire to outsource responsibilities and limit liability
• Small to midsized employers seeking comprehensive services
• Limited retirement plan knowledge or experience

MCBS Pooled Retirement Plan
The Minnesota Chamber of Commerce has teamed up with Securian Financial to offer a PEP exclusively for chamber members. If you are interested in learning more, fill out this short form and a chamber representative will reach out with more information.

Eric F Schneeman, AIF®
Sales Vice President
Securian Financial