Pooled Employer Plans: A Strategic Growth Opportunity for Advisors
As retirement plan complexity continues to rise, advisors are increasingly being asked to do more than just recommend investments. Plan sponsors want help managing other areas of fiduciary risk, controlling costs, and simplifying plan administration—without sacrificing participant outcomes.
Pooled Employer Plans (PEPs) are emerging as a powerful solution at the center of that conversation, and for advisors, they represent both a client benefit and a practice growth opportunity.
Why Advisors Are Leaning Into PEPs
Plan sponsors today are under mounting pressure. Rising audit costs, increased regulatory scrutiny, and ongoing fiduciary obligations are stretching internal resources—particularly for small and mid-sized organizations. As a result, many sponsors are actively seeking ways to outsource administrative complexity and reduce fiduciary exposure.
PEPs are one way to address these challenges by allowing multiple employers to participate in a single plan, gaining access to scale, professional fiduciary oversight, and streamlined operations. Recent employer surveys show that a significant and growing percentage of plan sponsors are considering a transition to a PEP, often with lower costs and easier plan management cited as the primary motivators.
For advisors, this shift reflects a broader evolution in the market: plan sponsors are no longer focused solely on investment menus—they are seeking governance solutions and administrative relief.
Understanding the Structural Advantage of PEPs
While Multiple Employer Plans (MEPs) have existed for decades, adoption was historically limited due to regulatory constraints and shared liability concerns. The SECURE Act of 2019 fundamentally changed the equation by introducing PEPs and introducing the role of the Pooled Plan Provider (PPP).
Under a PEP structure, the PPP serves as the plan sponsor and ERISA 403(a) fiduciary, assuming responsibility for core administrative and compliance functions. Unlike traditional MEPs, PEPs do not require participating employers to share a common industry or affiliation—significantly expanding their applicability.
Subsequent enhancements under SECURE 2.0 have only strengthened the model, making PEPs accessible to more plan types and supporting plan design features like automatic enrollment.
Expanding Beyond the Small Plan Market
Although PEPs were initially designed to help close the retirement coverage gap for smaller employers, adoption is now accelerating across mid-sized and even larger plans. These sponsors often already offer competitive retirement benefits but are seeking:
- Relief from audit and compliance costs
- Reduced fiduciary exposure
- Greater operational efficiency
- Consistent, institutional-quality plan management
Market growth data reflects this momentum, with PEP assets and employer participation increasing rapidly year over year. Employer satisfaction rates are high, driven by improved plan oversight and reduced administrative burden.
The Advisor’s Role Has Never Been More Critical
As PEPs gain traction, advisors are central to helping plan sponsors evaluate whether a pooled solution—or a stand-alone plan—best aligns with their objectives. Advisors bring value by:
- Assessing plan fit and fiduciary implications
- Guiding sponsors through conversion and implementation
- Supporting ongoing monitoring and oversight
It is important to note that while PEPs allow sponsors to outsource significant fiduciary responsibility, they do not eliminate it entirely. Adopting employers must still engage in prudent due diligence and monitoring of the PEP and its providers, validating why the arrangement continues to be in the best interests of its plan participants. Advisors can play a key role in establishing and documenting that process.
Differentiation in a Crowded PEP Marketplace
As demand increases, a wide range of organizations have entered the PEP ecosystem—each offering different models, capabilities, and levels of fiduciary support. For advisors, helping clients select the right PEP partner is a critical differentiator.
Key considerations include:
- Depth of fiduciary experience
- Governance and compliance infrastructure
- Operational scale and consistency
- Transparency in roles, responsibilities, and pricing
At Pentegra, we view PEPs as an extension of disciplined fiduciary governance—not simply a product. A well-structured PEP can enhance advisor relevance, strengthen client relationships, and create scalable growth opportunities across an advisory practice.
Looking Ahead: PEPs as a Core Advisory Strategy
PEPs are no longer an emerging concept—they are becoming a foundational element of the modern retirement plan landscape. As fiduciary expectations continue to rise, advisors who can confidently guide sponsors through pooled solutions will be well positioned to deliver differentiated value.
For advisors, the opportunity is clear: move beyond plan design and investments, and lead with governance, risk management, and positive plan outcomes. With decades of fiduciary experience and deep institutional expertise across both MEPs and PEPs, Pentegra brings advisors the advantage of a proven partner—combining disciplined governance, scalable plan design, and the confidence that comes from working with a dedicated fiduciary partner. For more information, contact the Pentegra Solutions Center at solutions@pentegra.com or 855-549-6689.