The Evolution of Pooled Employer Plans: What We’re Seeing Now—and What Comes Next
Since the introduction of Pooled Employer Plans (PEPs) through the SECURE Act of 2019, adoption has steadily accelerated as employers search for meaningful relief from the growing complexity of retirement plan sponsorship. Administrative burden, fiduciary risk, and rising plan costs continue to challenge organizations of all sizes, making the PEP model an increasingly attractive alternative to the traditional single-employer plan.
As the market matures, several clear patterns are emerging—both in where PEPs are gaining traction and how employers and advisors are evaluating their value.
Where PEP Adoption Is Gaining Momentum
So far, PEP growth has been most pronounced among small to mid-sized employers, particularly those without dedicated in-house HR or employee benefits teams. For these organizations, the appeal is straightforward: shared services, professional fiduciary oversight, and simplified plan administration.
Geographically, regions with a strong advisor presence and more competitive retirement plan markets have tended to adopt PEPs more quickly. Education and distribution are key differentiators. Where advisors are actively introducing the model, explaining its benefits, and guiding sponsors through the transition, adoption has often followed.
Industry trends also tell a compelling story. Professional services firms, healthcare practices, nonprofits, and franchised businesses have shown outsized interest in PEPs. These employers often share similar workforce demographics and operational needs, making the scale efficiencies and standardized governance of a PEP particularly compelling.
Importantly, momentum continues to build as awareness improves and early adopters demonstrate real-world operational success.
How PEP Pricing Compares to Single-Employer Plans
From a pricing standpoint, PEPs are generally competitive—and in some cases less expensive—than comparable single-employer plans when bundled services are fully considered. But the true value of a PEP extends beyond headline fees.
Institutional pricing, shared fiduciary responsibility, and operational efficiency combine to deliver outcomes that smaller plans have historically struggled to achieve on their own. For many employers, PEPs unlock access to pricing and service levels that were once reserved for much larger plans.
That said, plan sponsors are becoming more sophisticated buyers. Pricing transparency is critical, and employers are increasingly focused on total cost versus perceived savings. As the PEP marketplace continues to mature, fee compression and clearer differentiation among providers are likely.
Challenges to Buy-In and Implementation
While interest in PEPs is strong, education remains one of the biggest hurdles to broader adoption. Many employers—and even some advisors—still need clarity on what a PEP is and how it differs from traditional retirement plan models.
One of the most common challenges is simply explaining what a PEP is—and what it is not. Employers frequently conflate PEPs with legacy Multiple Employer Plans (MEPs), leading to confusion around fiduciary roles and responsibilities. In particular, there is often uncertainty about which duties remain with the employer and which are assumed by the pooled plan provider (PPP) in a PEP.
Operationally, onboarding and payroll integration can also introduce complexity, especially for employers transitioning from a long-standing standalone plan. Advisors play a critical role here, helping sponsors navigate fiduciary, governance, and operational changes with confidence.
Another barrier can also be control. Some employers—especially those sponsoring well-established smaller and mid-sized plans—are hesitant to relinquish control over investment menus, providers, or plan design. These sponsors often feel “big enough” to manage on their own, even as compliance demands and fiduciary exposure continue to grow.
The good news: once a PEP is adopted, satisfaction tends to be high. Day-to-day complexity is reduced, and sponsors gain confidence knowing key responsibilities are being professionally managed.
What’s Next for the PEP Marketplace
Looking ahead, the PEP landscape is poised for continued evolution. Consolidation among providers is likely, with scale, service quality, and technology emerging as key differentiators. As best practices become more established and regulatory clarity continues to improve, hesitation among late adopters should diminish.
For advisors, the conversation is also shifting. Rather than selling the concept of a PEP, the focus is increasingly on helping clients determine whether a PEP is the right fit—and if so, which model best aligns with their goals, culture, and workforce.
Ultimately, from our vantage point, PEPs are moving from a novel solution to a mainstream option within the retirement plan ecosystem. For employers seeking simplicity, scale, and shared responsibility—and for advisors guiding them through an increasingly complex fiduciary landscape—the role of PEPs is only set to grow.
As a CEFEX-certified Pooled Plan Provider and 3(16) administrative fiduciary, Pentegra brings deep experience and proven oversight to the PEP model. To learn how Pentegra can help you deliver smarter, more scalable retirement solutions, connect with a Pentegra PEP specialist at solutions@pentegra.com.