Frequently Asked Questions
· Is the Pooled Employer Plan (PEP) a good retirement plan for my business?
The PEP can be a great solution for small to mid-sized businesses that don’t currently offer a retirement plan. It’s a professionally administered retirement plan that includes reduced fiduciary liability, simplified plan administration for employers, and potential savings due to the pooling of resources. For those currently offering a retirement plan, this is a great solution that significantly reduces an employer’s involvement with plan administration. The PEP also satisfies the retirement plan requirement in states that have this mandate.
· I’ve wanted to start a retirement plan for my business and employees, but it seems too complicated. How will the PEP be different?
Owners are busy running their business, so they may find it hard to devote time and energy to the complexities of 401(k) compliance and plan administration. The RetireMint PEP significantly relieves businesses of this burden by providing a professionally administered and cost-effective retirement plan. As the formal plan administrator, we bear the bulk of the fiduciary liability for administering the plan.
By integrating payroll with your retirement plan employers achieve an even higher level of efficiency. A fully integrated retirement solution simplifies administration, helps to reduce errors, and can increase reporting accuracy.
· Will my business be eligible for tax credits for adopting the PEP?
Per the SECURE Act, employers may be eligible for tax credits, which can add up to $16,500 over 3 years (depending on eligibility and adding auto-enrollment).
· As the Pooled Plan Provider, what will RetireMint do for me compared to other retirement plans?
The PEP more fully approaches a “do-it-for-me” solution, relieving participating employers of many of the administrative tasks that are associated with most retirement plans. We will handle the hiring and monitoring of the 3(38) investment manager, complete the plan’s independent financial audit, file the Form 5500, collect and store participant beneficiary information, deliver required participant notices, handle the loan, hardship, distribution, and QDRO (qualified domestic relations order) requests, and much more. Taking these tasks off your plate will help you focus more on your business and less on administering this valuable employee benefit.
· If I want to adopt the PEP as a participating employer, how long will it take?
The onboarding process takes approximately 35 days to complete, depending on timing of information exchanges and payroll process.
· Will participating in a PEP be expensive or difficult?
Participating in a PEP is particularly beneficial since it’s a cost-effective way to offer a retirement plan to employees. For example, the enhanced tax credit potential (up to $5,000 for each of the first three years of the plan, plus an additional $500 for each of the first three years of the plan for auto-enrollment) can help offset startup costs for eligible employers. And with the RetireMint PEP, we help make the process of establishing a plan as straightforward as possible. You will need to take some initial actions to enable us to administer the plan and meet certain legal requirements, but our trained retirement specialists are available every step of the way — from initial plan setup to onboarding and ongoing plan maintenance — to provide assistance.
· What is the difference between a MEP and a PEP?
A Multiple Employer Plan (MEP) is similar to a PEP, but it requires businesses participating in the plan to be related by industry or professional association. If one employer in the plan does not comply with plan regulations, it can disqualify the plan and put the other employers at risk. By allowing unrelated businesses to participate, the PEP opens up the playing field for smaller businesses not associated by industry. And since the Pooled Plan Provider takes on most fiduciary responsibilities, it reduces the risk to individual participating employers.
· What businesses are eligible for pooled employer 401(k) plans?
Any size business may be eligible to join a Pooled Employer Plan 401(k). Providers may have their own criteria for being accepted into the plan.
· Is the RetireMint PEP customizable for my business and employees’ specific needs?
Yes, the RetireMint PEP has the flexibility to meet any of our clients’ unique needs by providing options for plan design features such as eligibility and vesting alternatives, optional matching contributions, safe harbor provision, Roth and pretax contributions for participants, auto-enrollment and auto increase, and profit-sharing options.