A New Path Forward
The future is
looking brighter
With the passage of the SECURE ACT in 2019, Congress provided a big opportunity for the American Entrepreneur to gain access to a unique type of 401(k) plan for their business. Pooled Employer Plans (PEPs) are a retirement plan available to two or more unrelated employers. PEPs are like their cousin, Multiple Employer Plan (MEPs), because both plans offer administrative efficiency and economies of scale to the unrelated adopting employers. However, PEPs go a step beyond in a number of ways.
“Members Only” vs.
“Come one, come all!”
No Association Necessary
Just value & efficiency
MEPs have been around for decades and are widely used in the PEO and professional association world. However, the most prominent issue with MEPs is that they cannot be “for everyone”. This is because MEPs require any adopting employer to be part of an “employer nexus”. Meaning: businesses must share commonality with one another to adopt a MEP. This is generally achieved through membership or affiliations with the sponsoring entity. This requirement for affiliation is NOT required with PEPs, thereby opening the door for millions of businesses to join!
Liability &
Responsibility
To Own or to Outsource
In a traditional MEP, the PEO or association sponsoring the plan is often the named Fiduciary AND Trustee. As a fiduciary, the sponsor is liable for administrative compliance and investment selection/compliance. Additionally, the sponsor must sign off on transactions within the plan including loans, distributions, and the Form 5500. These responsibilities can be outsourced to providers but that isn’t required by the DOL.
With PEPs, the sponsoring entity can outsource administration of the plan to an outside provider known as a Pooled Plan Provider (PPP) OR can serve as their own PPP. Regardless the plan must have a §3(16) Administrative Fiduciary (responsible for plan compliance), a §3(38) Investment Fiduciary (responsible for investment selection and compliance), AND a designated CORPORATE Trustee. This enables the sponsoring entity to insulate themselves against most (but not all) of the liability in the plan.
NestEggs:
the bundled solution
We were built for this!
NestEggs offers a TRULY bundled solution. We were BUILT for PEPs because we handle the services of ALL necessary PEP providers under one roof. As such, we will serve as
- Pooled Plan Provider
- Third Party Administrator / §3(16) Administrative Fiduciary
- Investment Adviser / §3(38) Investment Fiduciary
- Record Keeper
Let NestEggs be your single-point-of-contact for EVERYTHING.
