A Pooled Employer Plan (PEP) allows multiple unrelated employers to participate in a single retirement plan, administered by a Pooled Plan Provider (PPP). This structure streamlines plan administration and potentially reduces costs by leveraging economies of scale. For example, small businesses that previously struggled to offer retirement benefits due to administrative complexities can now access a cost-effective solution through PEPs.
Offering retirement benefits is crucial for attracting and retaining talent, contributing to employee financial security, and promoting overall economic stability. PEPs enhance access to such benefits, particularly for smaller businesses. Prior to the SECURE Act of 2019, which introduced PEPs, small businesses faced significant administrative and fiduciary burdens when offering retirement plans. This often made offering such benefits impractical. PEPs address these challenges, simplifying the process and expanding access.
