PEPs may be one of the retirement industry’s hottest topics, but don’t let the buzz fool you—just because it’s a PEP doesn’t mean it’s the right PEP. While pooled employer plans can reduce administrative burden and shift certain fiduciary responsibilities, they are far from one-size-fits-all.
At a recent TPSU program hosted at Bellevue College, Fred Barstein spoke with adjunct lecturer Rich Hultquist of SCS Financial about the growing interest in PEPs and why plan sponsors should still approach them with a due diligence mindset. Hultquist explained that as more recordkeepers and advisory firms launch PEP solutions, employers should compare multiple options just as they would when selecting a recordkeeper or retirement plan provider. And even after joining a PEP, plan sponsors still need support around employee education, engagement, and ongoing plan oversight. In other words, don’t shop for the acronym—shop for the outcomes.
Read the Full Transcript Here:
Fred Barstein:
Greetings. My name is Fred Barstein. I’m the CEO and Founder of TPSU and 401kTV. I’m here on the campus of Bellevue College in the Seattle, Washington area, where we just completed a TPSU program with our adjunct lecturer, Rich Hultquist.
Welcome, Rich.
Rich Hultquist:
Thanks for having me, Fred.
Fred Barstein:
Okay if we ask you a few questions?
Rich Hultquist:
Absolutely.
Fred Barstein:
Very good. Before we start, tell us a little bit about yourself and your firm.
Rich Hultquist:
Sure. I’ve been in the retirement plan industry for over 25 years, always here in the Pacific Northwest, focused exclusively on qualified retirement plans. I’m with SCS Financial. We’re a large RIA based in Bellevue, and our firm is split about evenly between wealth management and our 401(k) qualified plan practice.
Fred Barstein:
One of the topics that came up today was PEPs, or Pooled Employer Plans. Are you hearing much about them, and what’s your take?
Rich Hultquist:
We’re definitely hearing more about PEPs, both because of what’s happening across the industry and because more recordkeepers are creating them. Even some advisory firms have built their own PEPs.
Our view is that not all PEPs are created equal. Some firms position their own PEP as the solution, but we take a different approach. There are many PEPs available that employers can join, so we treat them much like we treat recordkeepers.
If a plan sponsor is a good candidate for a PEP, then part of the due diligence process should be evaluating multiple PEP options. We’ll often show clients three, four, or five different PEPs and help them determine which one is the best fit, rather than simply recommending one because it’s the one we happen to offer.
Fred Barstein:
Even after joining a PEP, employers can still work with you on employee education and reviewing the plan, correct?
Rich Hultquist:
That’s right. A PEP allows you to outsource many fiduciary oversight responsibilities, but you still need employee education. You still need employee engagement. There are still responsibilities that employers and plan committees have, and we’re there to help with those aspects.
Fred Barstein:
Final question. You haven’t taught a TPSU program in a while—you were actually one of our original adjunct lecturers back in 2013. What do you think is the biggest value that plan sponsors receive by attending TPSU?
Rich Hultquist:
From an industry standpoint, TPSU is about educating people on responsibilities they’re expected to understand. What always stands out to me is that many plan sponsors don’t realize just how broad those responsibilities really are.
We had some very large plan sponsors in today’s session, along with smaller organizations, and they all struggle with the same challenges. Everyone is trying to improve participant outcomes, increase employee engagement, and build a better retirement plan.
It doesn’t matter whether you’re a publicly traded company or a small employer. They’re all asking the same questions: How do we improve employee engagement? How do we increase retention? How do we make our retirement plan better?
The kind of ideal plan that TPSU teaches and promotes is designed to help employers achieve better participant outcomes.
Fred Barstein:
Eventually, the perfect plan will also include guaranteed income.
Rich, thank you for participating as one of our adjunct lecturers.
Rich Hultquist:
Thank you.
Fred Barstein:
And thank you for watching 401kTV. Stay tuned for more.
