What is a Pooled Employer Plan?
A pooled employer plan (PEP) is a 401(k) Retirement Plan that allows unrelated businesses to participate in one plan managed by a pooled plan provider (PPP). The PPP is the fiduciary of the PEP and has discretion over plan administration and investments, which reduces administrative burden and risks for participating companies. Streamlining and delegating retirement plan administration to experts allows employers to focus on their core business and more strategic priorities.
The PPP is responsible for selecting and monitoring any third-party vendors hired to deliver services for the PEP, including trustees/custodians, recordkeepers, investment managers and external consultants such as plan auditors. PEPs have emerged as an attractive alternative to traditional 401(k)s – reducing the administrative tasks and risks involved in sponsoring a plan. Also offering significant opportunities for economies of scale and improved retirement outcomes for American workers.
What are the Benefits of a PEP?
There are plenty of good reasons to consider a PEP for your organization, including:
· Improved retirement outcomes and lower costs for employees & employers
· Less work for management teams – saving time & resources dedicated to administrative tasks
· Reduced risk for employers and fiduciaries
Overall, joining a PEP will allow your team to focus more energy on building a resilient workforce while shifting key administrative tasks & fiduciary liability to your provider, including:
· Annual Audits and Form 5500 preparation
· Communication and education
· Compliance requirements
· Fiduciary oversight
· Financial wellness
· Enrollment & termination
· Rollovers and distributions
· Investment decisions
· Nondiscrimination testing
· Maintaining records
· Tracking eligibility
· Participant experience
· Plan documents and SPDs
· Quarterly reporting
· Recordkeeping
· Regulatory updates
· Plan Administration
· Vendor selection and monitoring
How Does the RetireMint PEP Work?
The RetireMint PEP is designed for companies with at least 100 employees participating in the 401(k) plan. In our PEP model, FinWay Group operates as the pooled plan provider (PPP) and named fiduciary. This means they are responsible for all plan operations and compliance and oversee and monitor all related service providers. Key attributes of our PEP model include:
As the PPP, FinWay Group’s responsibilities include serving as the 402(a) fiduciary, ERISA 3(16) plan administrator. ERISA 3(38) investment manager is Cota Street.
Service Providers
RetireMint partners with the following service providers to deliver our PEP:
· Recordkeeper and trustee: Empower
· 3rd Party Auditor
· Investment managers: Fidelity, American Funds, State Street, Blackrock, JPMorgan and more
· Self-directed brokerage window: TD Ameritrade
Flexible Plan Design
We offer employers the flexibility to define 401(k) eligibility for employees, vesting provisions, employer matching and other contribution levels. Each plan has their custom plan designs.
Participants can also choose from pre-tax, after-tax and Roth contributions.
Finally, we offer a range of target date, index funds and active management investment options, as well as access to the broader market through the TD Ameritrade platform.
Employer Role
Most importantly, Employers will be able to define & implement their own plan design – ensuring they have the right plan features to effectively compete for talent in today’s competitive and dynamic employment environment.
In addition, your organization will be able to transfer nearly all fiduciary obligations and ongoing administrative duties to FinWay Group as the PPP. However, you will still need to retain the fiduciary role of selecting a PEP and oversee and monitor the PEP and its performance.
The future of 401(k) is here and we are excited to offer this dynamic platform to you.