PLANSPONSOR - April/May 2021 - 2

When Help Is Needed
INSIGHTS
E
arlier this year, we reported statistics from Alight
Solutions' " Hot Topics in Retirement and Financial
Wellbeing 2021 " report, and the findings emphasized
that only 1% of sponsors surveyed were interested in joining a
pooled employer plan (PEP), with 4% being moderately interested.
The rest were not at all interested in joining a PEP.
Why was it of note that existing plan sponsors were
unlikely to pursue a PEP plan design? Why would sponsors such as you, those with
a current plan offering-and serious enough about your plan administration to
turn to a brand called PLANSPONSOR for information-want to move to a PEP?
This is a new form of multiple employer plan (MEP) that still needs more regulatory
guidance and clarity as to how the plans will work.
A caveat: This is not meant to sound negative about PEPs. For companies without
a plan, a PEP could be a valuable solution. I believe this will be an important addition
to the arsenal used to expand retirement plan coverage to all Americans.
But let's get back to PEPs and current plan sponsors. As one industry executive
recently commented to me, " No one wakes up on a Friday morning and says,
'Let's fix my unbroken plan.' " So why was anyone surprised that the survey found
this particular plan design uninteresting to the majority of existing plan sponsors?
Let me note that the survey finding doesn't mean that plan sponsors of existing
plans won't be pitched, as those offering these plans seek to get distribution. But,
for those who already have a plan, who have spent time picking a recordkeeper,
selecting an investment lineup, and customizing the plan to their company's specifications
and employee demographics, what appeal would a PEP have?
Those I've posed that question to who champion PEPs say it's the administrative
support and the offloading of some major responsibilities to the pooled plan
provider (PPP). But, in response, I ask: Can't much of that be found by enlisting and
hiring outsourced 3(16) and 3(38) fiduciaries?
Those who tout the benefits of PEPs are really, in many instances, touting
the ease of administration for the participating companies. And I agree, what plan
sponsor has not benefited from access to, and support from, industry experts?
Plan sponsors need support; offering a retirement plan leads to many questions.
But the answer isn't always to switch to a different plan type. Sponsors have
a range of solutions and services available.
I encourage you to assess your plan providers and advisers and ensure the
support you receive meets your needs. If you want help with your plan administration,
interview some providers of 3(16) fiduciary services. If you want to offload
much of the responsibility for your investment menu selection, interview 3(38)
investment managers. While you retain the fiduciary responsibility for selecting
these providers, you can eliminate some major day-to-day decisionmaking.
And a little reminder to properly do your due diligence when evaluating service
offerings, to make sure that what a provider says it will do in terms of plan management,
matches your expectations.
The promotion of PEPs reminds us that there are many opportunities to find
help in this industry-and new and more expansive services are being developed
seemingly daily-just look to our website. No sponsor needs to do this on its own.
-Alison Cooke Mintzer, Publisher
2 PLANSPONSOR.COM April - May 2021
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