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More Than Half of U.S. Employers Expected to Merge Existing 401(k) Plans Into Pooled Employer Plans (PEP) By 2030


Key Takeaways

  • A PEP drastically cuts down on the overall expenses of a workplace retirement plan
  • PEPs allow participants to save nearly 11% more for retirement their traditional 401(k) plans
  • Savers who use a PEP in lieu of a traditional 401(k) plan will save an average of $130,000 more for retirement

There are those that are trendy, and those that are trend setters; and then there's us, who are simply iconic and one-of-a-kind. 💁‍♀️ *hair flip*

We knew we were right to put our name and our seal of approval on Pooled Employer Plans (PEPs), but it is always nice to see validation in writing:

"We expect more than half of U.S. employers to merge their traditional 401(k)s into pooled employer plans by 2030... (The Aon PEP) now has more than 70 employers providing 401(k) benefits to over 50,000 employees.”

Although Aon was able to launch their PEP before we were able to get the proper regulatory matters in place to offer our own PEP/ Prosper 401(k)- it should be noted that Prosper Retirement Partners is ✨also✨ providing this solution to more companies (and we did it in less time with less manpower, humble brag).

Again, PEPs were made specifically with small businesses in mind:

- Cutting administrative expenses substantially
- Improving investment integrity by retaining more in the plan balance and aggregate assets more than a typical 401(k) plan
- Nullifying the need for individual annual audits/ nondiscrimination testing
- Voiding the need for an ERISA fidelity bond
- Centralizing both the investment management and record keeping
- All while also providing a suitable and easier-to-understand alternative to the state AutoIRA programs (you're welcome HR departments)

Unlike, Aon we don't have over 50,000 participants- but that's because we work with small businesses, and prefer to keep it that way. We wouldn't have gone out on a limb for such a new financial product without being absolutely certain it was the right choice for our current and future clients.

We would hate for people to think we are bandwagoning when we are simply priding ourselves on being retirement plan experts, that always pivot and provide maximum value to our CLIENTS- not SHAREHOLDERS.

You cannot achieve our level of expertise if you are too busy appeasing shareholders at the (literal) expense of your clients. Shouldn't you, as a small business, utilize the exact mechanism that was created for small businesses through an actual small business provider? #realseesreal

I guess we should at least thank Aon for somewhat popularizing the PEP, before business owners start doing the hard math and have the harsh realization they are dramatically overpaying for an inferior product...

Or better yet, just send us your plan statements and Fi401k Advisors, LLC will fix it all for you. You can still claim you're a trend setter, too. 😉

A killer piece out of our neighbors 401(k) Specialist Magazine once again- nice findings Brian Anderson!

Read the full article here:

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