Independent PEP launched by Pentegra, The 401(k) Plan Company

Pentegra PEP, Pooled Employer Plan

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The latest Pooled Employer Plan is open to any 401k plan sponsors and advisors.

Pentegra, a leading provider of retirement plan and fiduciary outsourcing solutions, today announced the launch of an open, independent PEP— called “A Better 401(k) Plan,” in conjunction with The 401(k) Plan Company, an association of national retirement-focused advisors.

According to Pentegra, the collaboration was the natural outgrowth of the White Plains, N.Y.-based company’s legacy offering multiple employer plans (MEPs), encompassing nearly eight decades of multiple employer retirement plan expertise and fiduciary advocacy.

Pentegra said “A Better 401(k) Plan” is a more flexible solution and robust alternative to many PEPs that have been introduced in the marketplace, and to mandated state-run offerings. Each PEP can be private-labeled based on the state in which the company is located.

A Better 401(k) Plan is not prohibited by proprietary investment requirements to allow advisors to have input on the investment menu as opposed to having to choose a recordkeeper’s standard product. The PEP empowers employers and advisory firms with leading-edge technology, such as an artificial intelligence due diligence tool, to deliver more comprehensive investment committee decision-making.

There are currently two platform and design options available, with Pentegra serving as the ERISA 3(16) fiduciary and 401(k), LLC serving as the ERISA 3(38) investment manager for both arrangements.

PEPs allow unrelated companies or organizations to band together to create a pooled retirement program. A Better 401(k) Plan will help employers save time with a single 5500 and reduced audit responsibilities, greatly minimize fiduciary risk with outsourcing of 3(16) administrative responsibilities, and take advantage of economies of scale pricing.

John Pinto

“As one of America’s oldest independent fiduciaries, we believe PEPs are an ideal way to help make offering a retirement plan easier for businesses,” said Pentegra President and CEO John E. Pinto. “PEPs allow each adopting employer to reduce its administrative and fiduciary burdens, as the PPP and 3(38) investment fiduciary shoulder responsibilities on behalf of the adopting employers. Pooled retirement benefit plans also allow cost efficiencies for adopting employers based on pooling the plan’s assets.”

Added Tom Frost, Founder of The 401(k) Plan Company, “With the cost-saving advantages of pooled assets, more of our customers can help their employees take advantage of the benefits of a tax-advantaged retirement plan. PEPs offer an ideal way to expand retirement coverage and help more Americans save for a secure financial future. We are proud to align with Pentegra, a leading fiduciary services provider, to offer the ‘A Better 401(k) Plan’ PEP.”

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