In less than two months from launch, the new Pooled Employer Plan from Paychex reached an impressive milestone: 1,000 Paychex clients opted into the PEP.
Now, in only three months, perhaps an even more impressive milestone has been reached with Paychex, Inc., the Rochester, N.Y.-based HR software and services company that is also one of the largest recordkeepers for retirement plans, announcing April 19 that its Pooled Employer Plan has doubled that, reaching 2,000 clients since launching at the start of this year.
In the brief time since PEPs have become available as a result of the SECURE Act, the new Paychex PEP is proving to be an attractive option for business owners seeking a simpler, cost-effective plan option, both for themselves and their eligible employees, according to a statement from Paychex. The company was one of the first to introduce a PEP among retirement plan providers, announcing back in December that its PEP would launch Jan. 1, 2021, the first day such plans were allowed under the SECURE Act.
“From day one, it was our mission to get this solution to businesses which have long been on the sidelines without an established 401k plan or other retirement savings vehicle. Traditionally, the complexity of plan management and the overall cost has been a barrier. But with our PEP, many of those challenges have been addressed,” said Tom Hammond, Paychex vice president of corporate strategy and product management. “The Paychex PEP simplifies plan administration, and the sign-on process is easier too. With one signature, a business is set up with a fully managed retirement plan offering. We’re giving workers access to a robust retirement plan benefit and allowing them to prepare for their financial future confidently.”
Through a PEP, employers can collectively participate in a 401k plan administered by a Pooled Plan Provider (P3). The P3 acts as both plan sponsor and formal plan administrator, relieving employers of significant fiduciary and administrative burden.
Paychex aligned with two other retirement industry leaders to provide services for the PEP, with Mesirow Financial serving as the 3(38) investment manager and Mid Atlantic Trust Company serving as the Trustee.
The PEP is especially well-suited for small to mid-sized businesses that may have been unable to offer a retirement plan previously due to the lack of cost-effective plan options or the time or resources needed to manage complex plan administration. PEPs also offer a more feature-rich alternative to the growing number of state-mandated retirement plan programs.
SEE ALSO:
- Paychex is Latest to Introduce a Pooled Employer Plan
- How Deep is the 401k PEP Pool?
- PlanMember is Latest Pooled Employer Plan Entrant
- Independent PEP launched by Pentegra, The 401(k) Plan Company
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
