For financial advisors who work with business-owner clients, the pitch for pooled employer plans has often started in the same place: lower fees. Mike Ziccardi, executive vice president of CBIZ's Retirement & Investment Solutions Practice in the US, says that framing is a mistake.
"Many advisors lead with cost savings, but that can oversimplify the value proposition," Ziccardi said. "Cost should not be the primary lens through which a PEP is evaluated."
A pooled employer plan, or PEP, allows unrelated employers to participate in a single, professionally managed 401(k) plan under one pooled plan provider. Authorized under the SECURE Act of 2019, PEPs were designed to reduce both the administrative burden and fiduciary exposure that have historically discouraged smaller companies from offering competitive retirement benefits. As of the end of 2023, there were 142 pooled plan providers registered with the Department of Labor, and 190 PEPs in operation as of statistical year 2022 — a 135 percent increase from the year prior, with approximately 618,000 participants enrolled, according to the DOL's 2025 Pooled Employer Plan Bulletin.
Adoption has been gradual. Ziccardi says that pattern is familiar across employee benefits innovation: large employers move first, and the middle market waits to see what happens. The economics compound that inertia. Employer contributions — typically the single largest plan expense — remain unchanged whether a company stays in an individual plan or moves to a PEP, which limits the urgency to act.
But Ziccardi argues the conversation has shifted, and those who haven't kept pace are leaving value on the table.
"The conversation has evolved well beyond investments," Ziccardi said. "Historically, many employers viewed retirement plan advisors primarily through the lens of investment oversight. Today, fiduciary risk management, governance, cybersecurity, participant outcomes, fee reasonableness, and operational compliance are often taking center stage."
Ziccardi sees that pushing the business toward specialization — generalists are losing ground to firms that can speak fluently to fiduciary risk and regulatory compliance, a trend playing out across the retirement plan advisory space.
For those recommending a PEP structure, Ziccardi emphasizes careful vetting of the pooled plan provider — the named fiduciary responsible for selecting and monitoring service providers within the arrangement.
"A key red flag is when a PPP occupies multiple roles within the arrangement," he said. "If the PPP is also serving as the advisor or recordkeeper, employers should carefully evaluate how potential conflicts of interest are being managed. Effective oversight requires independence, and employers should understand who is truly holding service providers accountable."
Ziccardi says middle-market employers are also rethinking how retirement plans fit into talent strategy — less a compliance checkbox, more a component of total rewards.
"Leading middle-market employers no longer view their retirement plan in isolation," he said. "It's becoming an integrated component of a broader benefits, financial wellness, and total rewards strategy. What's changed is that technology, automation, AI, and data integration capabilities have made personalization accessible to organizations of virtually any size."
Employees are driving some of that pressure. Accustomed to personalized recommendations everywhere else — streaming platforms, retail, social media — they increasingly expect their benefits experience to feel similarly relevant. That shift opens a wider conversation about how retirement plans fit within a broader employee benefits strategy.
When a PEP comes to the table, Ziccardi says the framing should start with administration and governance, not price.
"The more important considerations are whether the PEP meaningfully reduces fiduciary burden, simplifies administration for HR and payroll teams, and ultimately improves participant outcomes," he said. "Fee savings may certainly be part of the equation, but employers should also evaluate the quality of participant support, technology capabilities, financial wellness resources, and overall employee experience."
Ziccardi doesn't expect PEPs to become the default structure anytime soon. Growth, he says, will be concentrated in specific segments — mid-size employers caught between rising fiduciary risk, workforce competition, and the administrative weight of running a standalone plan. Whether cost savings follow is an open question: research from the Center for Retirement Research has found that PEPs don't necessarily deliver lower fees, though scale among providers could change that over time — a dynamic the DOL has been actively examining through a July 2025 request for information on what is discouraging smaller employers from adopting the structure.
The ones winning those mandates, Ziccardi suggests, aren't leading with the sharpest fee comparison. They're the ones who walked in talking about risk, governance, and where pooled employer plans can fall short on cost — and what it takes to make them work anyway.
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