Pooled Employer Plan (PEP):
Ubiquity's Express PEP

By pooling assets into one large plan, employers can achieve economies of scale, significantly reduce their administrative responsibilities, and lower their fiduciary liability.

In addition to making a retirement plan more affordable, advantages of Pooled Employer Plans for employers include:

• Lower risk

  Employers work with an administrator who accepts fiduciary responsibilities.

• Time-saving

  Employers needn’t worry about government filings, plan audits, or management duties.

• White glove service

  The administrator does it all for you, from setup, to IRS form filing, to enrollment.

• Improved compliance

  A good Pooled Plan Provider will ensure the best possible governance.

• Tax credits

  The SECURE Act offers financial incentives for the first three years of a new plan.

• Pricing

  Pooled employers can receive better pricing on investments due to economies of scale.

• Outcome

  Gain access to high-quality retirement planning options and services that bigger plans receive.

• Employee sentiment

  Offering your workers a secure future increases employee satisfaction and retention.

Benefits of a Pooled Employer Plan for employees include: 

• Education
  

  The employee portal provides informative resources to help participants make decisions about their retirement savings.

• Visibility
  

  It’s easy for workers to monitor and adjust their financial goals.

• Services
  

  Many PEPs come with choice perks, like financial advisor access, open to all employees.

• Cost
  

  PEPs feature lower administrative costs, so participants keep more of their money in the plan.

• Options
  

  PEPs can offer better options and access to low-cost share classes available to larger plans.

Given the numerous advantages for small businesses and plan participants, many industry analysts predict that the PEP 401k represents the wave of the future for small business retirement plans. Contact Ubiquity for a hassle-free transfer. Once you choose us as your Pooled Plan Provider, we’ll:

• Amend your single-employer plan to provide for a merger into a PEP
• Draw up a new plan document
• Transfer employee census data
• Transfer assets if necessary
• Fix any compliance or data issues
• Assume management duties

With the right PPP, switching from an existing 401(k) to a PEP is a seamless process. The electronic gateway may change, but the plan itself will function the same way and provide the same benefits. Contribution limits remain exactly the same as a typical 401(k) plan, though the employer will enjoy freedom from high costs, fiduciary responsibility, and administrative hassle.

Multiple Employer Plans (MEP) have been around for years. These retirement plans are often structured as 401(k) plans and are established and administered by a MEP organizer. The MEP is offered to many different employers but is treated as a single plan for administrative and compliance purposes. Rather than every individual employer filing Form 5500 with the Department of Labor (DOL), the MEP files one form on behalf of all employers participating in the plan.

In order to qualify for a MEP, there must be some commonality between the participating enterprises. Often, employers are linked by trade, association, or geographical location.

The Pooled Employer Plan was created in the SECURE Act to provide an alternative to MEPs by:

• Allowing ANY employer to join a PEP, even if there is no obvious common link
• Limiting PEPs to the use of a 401(k) plan
• Requiring that PEPs be sponsored by a PPP that has registered with the DOL and IRS
• Ditching the “one bad apple” rule that may disqualify all participants if one employer fails compliance

The two types of plans are similar in that the MEP organizer or the PPP becomes responsible for the reporting, compliance, and administration of the plan, rather than the employer.

• The SECURE ACT allows providers to offer PEP 401(k)s as of January 1, 2021.
• The SECURE Act provides up to $5,000 in annual tax credits for three years of establishing a new plan.
• Employers can receive an extra $500 per year for three years if they use auto-enrollment as a feature.
• While these credits apply to the creation of any 401(k), the savings go further with the economical PEP.

Contact Ubiquity for personalized assistance exploring your options for small business retirement plans, including the newly created Pooled Employer Plans.