In PLANSPONSOR, David Kirchner and Jonathan Reinstein Discuss Pooled Employer Plans Mid-Year Outlook

In a PLANSPONSOR article, Benefits Consulting Group principal David Kirchner and ERISA and benefits counsel Jonathan Reinstein provided a mid-year outlook on pooled employer plans (PEPs).

In the past few years PEPs have gained traction as defined contribution retirement savings vehicles for small, midsize and large employers. PEPs allow unrelated employers to join a single defined contribution plan overseen by a pooled plan provider, a third-party that administers the plan.

David explains that many different entities are stepping into PEP-related roles, and they are all doing it differently. He names third-party administrators (TPAs), professional employer organizations (PEOs), recordkeepers and consulting firms as examples of newcomers to working with PEPs.

David said that not all PEPs offer the same advantages. “Smaller employers who are just getting started and establishing a new plan can adopt a standard, straightforward plan design that is easy to report and administer. For larger employers who may already have an existing single-employer plan but want to move to a PEP, they will need a PEP that has more flexibility in its ability to accommodate and duplicate plan designs and features that are already a part of the existing plan,” said David.

On July 1, the U.S. Department of Labor submitted a request for information to the Office of Budget and Management concerning areas where regulatory or other guidance would facilitate establishment and operation of PEPs. Jonathan notes that further regulatory guidance on PEPs is needed.