Wave of PEPs hits the market

In the past week alone, at least three PEPs have been announced. Those include plans from American Trust, Access Retirement Solutions and a new entity from venture capital firm Magis Capital Partners, Sallus Retirement.

Pooled employer plans are coming to market at a clip, three months after the first ones were given the DOL’s blessing.

In the past week alone, at least three pooled employer plans, or PEPs, have been announced. Those include plans from American Trust, Access Retirement Solutions and a new entity from venture capital firm Magis Capital Partners, Sallus Retirement.

Late last year, the Department of Labor began allowing pooled plan providers to register, with the first PEPs being eligible to launch Jan. 1, 2021. PEPs were made possible under the SECURE Act, as an answer to the “open” multiple-employer plans the retirement services industry has long sought. PEPs are seen as a way to expand retirement plan access for workers who otherwise would not have it, as well as a market for employers that want to reduce the fiduciary liability associated with offering a plan.

The biggest splash so far in this new market has been from Fidelity Investments, which is specifically targeting small businesses that do not already provide retirement plans for their workers.

American Trust on Wednesday announced a PEP it has developed in conjunction with TAG Resources. American Trust affiliate AT Retirement Services, which registered today with the DOL, will act as the pooled plan provider. American Trust Company is the trustee and 3(38) fiduciary, meaning that it selects and monitors the plan’s investment options. TAG is the PEP’s third-party administrator and 3(16) fiduciary, according to today’s announcement.

That PEP will include active and passive investment options and is “customizable to the employer’s needs and participant goals,” the firms stated.

Another PEP, from Access Retirement Solutions, is branded under the American Association of Franchisees and Dealers, according to an announcement on Sunday. That PEP is the first to come to market from a national trade association, the groups stated. Access selects the pooled plan provider in that arrangement. The firm works with National Benefit Services, according to its website.

Last week, Magis Capital Partners launched Sallus Retirement, “one of the first fully independent and bespoke PPP solutions,” it stated in its announcement. Leading sales and distribution of that service is Lisa Kottler, who previously was head of NFP Retirement.

“Advisors and their clients are going to love what we’ve built,” Kottler said in the announcement. “They can design a plan with signature-ready documents in just a few clicks, rather than six to eight weeks, and at a fraction of the cost.”

Another firm planning to add a PEP by the end of the year is The Dayton Company, which works with registered pooled plan provider Fiduciary Wise. Recently, Dayton, along with IFAM Capital, Nationwide Financial and InWest Retirement Solutions announced a new multiple-employer plan. That service, Ekstra 401(k), touts a slim line of core investment options but roughly 1,400 mutual funds available through Nationwide’s record-keeping system and a self-directed brokerage option. For that MEP, IFAM acts as the 3(38) fiduciary, InWest as the third-party administrator and Dayton as the adviser.

“The access to the market [of investment options] is almost unlimited for participants,” said Michael Dayton, president of the adviser firm. “I’ve been using this model with my clients for about nine years now, very successfully.”

ETFs stealing the stage from mutual funds

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