Investment Consulting Services Pooled Employer Plan
The Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law in December 2019 and is the first significant retirement plan-related legislation in more than a decade. The SECURE Act is intended to strengthen retirement security by offering employers incentives to establish new retirement plans and adopt certain features as well as expanding individuals’ access to tax-advantaged retirement accounts. A key provision of the act allows employers to offer a retirement plan through a Pooled Employer Plan (PEP). This provision makes it easier for small and midsized businesses to set up, administer, and monitor a retirement plan for their employees.
What is a Pooled Employer Plan (PEP)?
A PEP is a new type of multiple-employer 401(k) plan that allows unrelated businesses to participate in a single 401(k) plan that is maintained by a Pooled Plan Provider (PPP). The PPP sponsors the 401(k) plan and handles all investing and operational duties for the participating employers. A PEP makes it easier for employers of all sizes to offer a 401(k) plan.
Flexible Plan Provisions
Choosing a PEP 401(k) doesn’t mean that you need to give up flexibility when it comes to plan design. The ICS PEP lets participating employers choose from a wide variety of plan features so you can tailor your company’s 401(k) to the needs of your workforce. Some customizable provisions include:
- Automatic enrollment
- Automatic escalation
- Eligibility criteria
- Employer match
- Profit-sharing contributions
- Safe Harbor contributions
Advantages of a PEP
By outsourcing the administration, recordkeeping, investment selection and monitoring, and daily operations of a 401(k) plan, employers free up valuable time to focus on growing their business.
Reduce fiduciary liability
Because administrative and investment fiduciary services are outsourced, employers that participate in the PEP are not subject to the same level of fiduciary liability as employers that maintain single employer 401(k) plans.
Small 401(k) plans don’t have the cost savings benefits of larger plans. The PEP allows small 401(k) plans, even new plans without assets, to immediately benefit from the scale of a single large plan. This can mean lower record-keeping, administrative, investment advisory, and investment management fees.
Attract and retain employees
Great companies need great people. Retirement benefits can be a deciding factor in a new employee’s decision to join a firm or an existing employee’s decision to stay. Stay competitive by offering an accessible, high quality, and easy-to-use retirement plan.
Why Investment Consulting Services?
The Investment Consulting Services Pooled Employer Plan (ICS PEP) is a flexible and cost-effective option for employers that want to provide a high-quality retirement benefit without the liability or administrative burden of a single employer 401(k) plan. Our PEP is designed to give participating employers control over many aspects of plan design while outsourcing the time-consuming operational and investment responsibilities. The ICS PEP allows employers the flexibility to design a 401(k) plan that works for their company while harnessing the benefits of a PEP.
Registered as the Investment Consulting Services Pooled Employer Plan with the Department of Labor.
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