Retirement Benefits Built for Small Businesses: Pooled Employer Plans (PEP)
As a small business owner, offering retirement benefits to your employees might feel out of reach. Nationwide, only about 37% of small businesses with 1 to 49 employees provide retirement plans.
Offering retirement benefits is one of the most effective ways to attract and retain high-quality talent. So, what's holding small business owners back? High costs, administrative burden, and a lack of time and expertise to manage a 401(k) plan are just some of the barriers. Perhaps the biggest issue is widespread misconceptions about what plan options are actually available today--and how easy they can be to implement.
Thanks to Pooled Employer Plans (PEP), small businesses now have access to affordable, professionally managed retirement benefits similar to those offered by large employers.
How a Pooled Employer Plan Works
The Setting Every Community Up for Retirement Enhancement Act (SECURE Act -- now SECURE 2.0) introduced pooled employer plans (PEP), enabling employers to provide cost-effective, high-quality retirement savings vehicles for their employees.
Pooled Employer Plans are defined contribution plans similar to a 401(k), but offer distinct advantages for small businesses and employees. In a PEP, employers of all sizes, industries, and locations join together and become member employees. This collective arrangement lowers costs for everyone, simplifies plan management, and makes retirement benefits more accessible to small employers.
What Makes Pooled Employer Plans Different?
As a small business owner, you already have plenty on your plate. The idea of adding yet another to-do can feel overwhelming, especially something as complex as a retirement plan.
That's where a PEP stands out. Instead of managing compliance, filings, and ongoing oversight of a retirement plan on your own, a PEP shifts these time-consuming responsibilities to a Pooled Plan Provider (PPP). The PPP serves as the plan sponsor, named fiduciary, and plan administrator, helping to simplify the process and reduce potential risk for small employers like you.
As a SOCA member, you have access to the Everhart Pooled Employer Plan (Newport PEP) managed by Everhart Advisors. As your PPP, Everhart will take on many administrative tasks, such as eligibility tracking, beneficiary management, and plan disbursements.
With SOCA and Everhart, it's easier than ever to offer a competitive benefit that supports your employees' long-term financial well-being.
Top Advantages of a Pooled Employer Plan:
- Share Costs, Reduce Expenses - With a PEP, costs are shared across a large, diverse group of employers and participants, helping reduce overall expenses for each business. Typically, business owners with our plan can save 30-40% compared to their current 401(k) plan. Plus, take advantage of up to 100% in tax credit to cover all costs if starting a new 401(k) retirement plan.
- Protect Against Fiduciary Risk - Because investment management responsibilities are outsourced to a plan advisor serving as an ERISA 3(38) investment fiduciary, your liability as an employer is reduced significantly. In fact, fiduciary responsibility is reduced by 95% compared to running a 401(k).
- More Time to Focus on Your Business - With fewer internal resources dedicated to retirement plan management, you can focus more on growing your business.
- Access to Retirement Planning Experts - With access to experienced retirement plan advisors, your business and employees will benefit from professional guidance and best practices.
With our pooled employer plan, you get control and visibility built in, including:
- Integrated trust and custody services to help keep plan assets managed securely and efficiently.
- Digital access to all plan functions and information
- Payroll contribution tracking and integration to simplify deductions, reporting, and internal administration.
Participating employees benefit from value-added services and tools, including education seminars, a financial wellness program, and integrated managed account services.
Start Providing Affordable Retirement Benefits
It's easier and more accessible than ever to offer affordable retirement benefits to your employees. With SOCA and Everhart, you can start providing a competitive retirement plan with professional support while reducing the cost and complexity that have historically held small businesses back.
Ready to take the next step? Fill out this form or contact Lisa Block, Partner/Regional Director (937) 260 4315 or lisab@everhartadvisors.com.