Pooled Employer Plans have grown rapidly since being authorized under the SECURE Act of 2019, with assets now estimated at $30 billion to $40 billion.
The appeal is clear: employers can outsource administrative work, shift some fiduciary responsibilities and gain access to experienced providers. Larger plans have shown the strongest interest, while major recordkeepers and advisory firms continue investing in the space.
Still, rapid growth does not necessarily mean PEPs are becoming mainstream. Adoption continues to be slowed by concerns about loss of control, limited cost savings, employee perception, advisor reluctance and potential conflicts of interest when recordkeepers or advisors also serve as the pooled plan provider.
Even if PEP assets grow tenfold over the next five years, they would still represent only a small share of the defined contribution market. For now, PEPs appear more likely to remain a growing niche than become a mainstream retirement plan option.
Read more insights in Fred Barstein’s Wealth Management article, “Are PEPs a Fad, Niche or Mainstream?”
