Advisors Gaining Popularity Along with the PEPs They’re Selling
You’ve probably heard that sales of Pooled Employer Plans, also known as PEPs, are skyrocketing, reaching more than $10 billion in December 2024 according to Cerulli Associates. You might also be aware that small and mid-sized employers are driving the adoption of PEPs.
But do you know how PEPs can help you expand your business?
New industry research spotlights a positive effect radiating from the popularity of PEPs. It shows employers are more satisfied with their retirement plan and with their advisor after joining a PEP.1
When asked about their overall experience with a PEP, 83% of PEP employers say they’re satisfied with the experience. That reflects a 26% rise in satisfaction with their retirement plan. Ease of plan management and cost savings were the top two reasons cited in the research for improved satisfaction.
The research results for advisor satisfaction are even more attention-grabbing. Before joining a PEP, 55% of employers said they were satisfied with their retirement plan advisor. After adopting a PEP, the rating jumped to 77% of employers—a 40% boost in satisfaction.
Competitive PEP offerings come with individualized employer plan design and pricing. For savvy advisors, this helps preserve the ability to consult on specific plan features. Individualized pricing also assists both advisors and employers. It allows them to weigh the additional outsourcing value that PEPs provide, compared with traditional standalone plans.
PEP Time Dividend
Another positive effect highlighted in the research is that after joining a PEP, employers’ conversations with their advisors expanded to a variety of topics. These included employee benefits, wealth management and executive benefits.1
Not only are employers and advisors getting valuable time back, PEPs are giving them the opportunity to deepen their relationships in areas that may otherwise lack attention. The PEP time dividend can allow advisors to better scale their business. Because PEPs involve an extensive amount of administrative and fiduciary outsourcing, advisors can better engage in more relationships. And for their overall book of business, they’re able to cultivate new relationships without adding to overhead.
Ride the Wave
If you aren’t already preparing for more client conversations around PEPs, you might not be maximizing your potential. PEPs are projected to match single-employer plans in new plan adoption over the next five to 10 years.2 And research shows 58% of employers with a PEP said an advisor or consultant recommended the plan.1
Another important factor pointing to deeper client discussions is that most employers surveyed considered multiple providers before selecting a PEP—as not all PEPs are created equal.
The bottom line is if you’re not talking to your clients about PEPs, your competition likely is. Are you ready to talk PEPs with new or existing clients? Get your business development plan in place with these steps:
Determine if a client is a strong candidate. PEPs may be a good fit for:
- Smaller to mid-sized employers who want comprehensive retirement plan services
- Organizations with limited or no knowledge of retirement plans
- Employers who just don’t have the resources and need to offload work
- Risk-averse companies wanting to outsource responsibilities and limit their liability
Be ready with the answers. You may need to go over the basics of PEPs, because some clients may still be in learning mode. Explain that although a PEP allows multiple unrelated employers to participate in the plan, it functions similarly to a single-employer retirement plan in many respects. However, this structure can constrain employers’ flexibility in customizing plan features and investment options. Do your due diligence. Pooled Plan Providers offer differing levels of individualized plan design. What’s universally true is that most administrative and fiduciary duties are outsourced to a Pooled Plan Provider that handles most of those duties.
Count down the benefits. PEPs can make it easier for employers to set up and administer a plan for their employees and come with other benefits. It’s also true that PEPs are not a good fit for every employer. For the right employer, a PEP can:
- Lower their administrative and fiduciary risks
- Reduce the time and resources they spend on plan administration tasks (In the recent industry research, two out of three PEP employers said they have more time to contribute to their company’s success in more varied and important ways after joining a PEP)2
- Potentially reduce the costs related to plan administration and audits
- Preserve individual employer plan design and pricing, creating unique employer experiences
Let your clients and prospects know how PEPs affect employees, too. A PEP can give them access to institutional-grade investment options and potentially lower their investment costs. Employees can also enjoy a high level of support and features offered by the Pooled Plan Provider. Ultimately, a PEP can enhance their retirement readiness outlook through professional management.
Help guide the selection process. For employers, choosing a suitable Pooled Plan Provider is an essential fiduciary duty that requires them to exercise due diligence. Partner with your client to identify the top attributes and questions to ask potential providers.
| Top PPP Attributes | Questions to Ask |
| Experience with both standalone and pooled plans | How many associates are dedicated to the Pooled Plan Provider’s work? What’s the tenure of your account management and relationship management team? How long have you been involved in qualified retirement plan administration? Does the Pooled Plan Provider enable and support individual employer plan design and pricing? |
| Demonstrated fiduciary and compliance capabilities | What responsibilities will you take on? Are you willing to take responsibility for planning and administration? What systems and structures do you have in place to manage the 3(16) fiduciary, the recordkeeper and the advisor? |
| Strength and expertise | What is the institutional nature of your business? How strongly do you stand behind your decision to be a Pooled Plan Provider? How can you demonstrate the strength, scale and stability of your organization? |
As PEPs continue their rise in the marketplace, the key components to increasing PEP sales are to understand their value, the perspectives of employers who have adopted them and the differing PEP options. Advisors who implement these components now will likely see the highest value and success in the future.
- PEPs Are a Win for Many Employers — And Advisors, Research Shows. This research was based on the results of a survey of 300 employee benefits decision-makers at mid-sized U.S. companies. Survey responses were collected by Burke, Inc. Jan. 3 – 26, 2025, on behalf of The Standard. All employers who responded were offered compensation from the third party to complete the survey. Data was collected in compliance with the ISO 20252 standard for market, opinion and social research by Burke, Inc. Burke is the first full-service marketing research firm to achieve ISO 27001 certification awarded through CIRQ, a subsidiary of the Insights Association in collaboration with PECB, the provider of audit and certification services. ISO 27001 is the internationally recognized gold standard for information security.
- PEPs Will Match Single Employer Plan Adoption in 5 to 10 Years: Fred Reish, NAPA, February 2024
The Standard is the marketing name for StanCorp Financial Group, Inc., and its subsidiaries. Standard Retirement Services, Inc., provides financial recordkeeping and plan administrative services. Standard Insurance Company and Standard Retirement Services, Inc., are subsidiaries of StanCorp Financial Group, Inc., and all are Oregon corporations.
SEE ALSO:
• IRI Pushes DOL to Issue PEP Guidance
• Employee Fiduciary Urges DOL to Nix PEP Safe Harbor
• The Standard Teams with BenefitEd on Student Loan Repayment Program
Ted Schmelzle, J.D., is vice president of Retirement Plans Service at The Standard. His professional specialities include consulting on Pooled Employer Plans, field relationship management, plan administration and recordkeeping, and regulatory and legal compliance.
