PLANSPONSOR - May/June 2024 - 11

fees and funds are reasonably priced.
" For a small employer, even though
it's much less of a responsibility than
before, that still might be a daunting
task, " Chen says. " On the cost side, there
are arguments for potential cost savings,
but we don't really have much data. ...
You could have cost savings because
you're pulling together a bunch of small
employers, but there could still be extra
costs. " A plan for 100 employers is administratively
more complicated than a plan
for one, she observes.
Angela Antonelli, a research
professor and the executive director of
the Center for Retirement Initiatives at
Georgetown University, says " only time
will tell " whether PEPs can actually alleviate
costs for small employers.
" There's still a lot we don't know
yet because providers are continuing to
innovate, collaborate and work out
the
kinks, " Antonelli says. " At the end of the
day, a PEP will be attractive if, with the
economy of scale, it can compete on cost
and burden reduction. That should be a
benefit of pooling. "
According to a 2022 Transamerica
survey, among employers not currently
offering a plan, and unlikely to do so by
the end of 2024, almost 30% said they
would consider joining a MEP, PEP or
group of plans that handle the fiduciary
and administrative duties at a reasonable
cost, vs. providing their own plan.
Natalya Shnitser, an associate
professor and research scholar at Boston
College Law School, says she thinks these
plans have the potential to expand access
to
retirement
savings, but employers
must ensure that they have the information
necessary to periodically monitor and
benchmark the PEP.
" Many of these PEP arrangements
are popping up, and, on the part of the
individual employer that's considering
joining, it's important to recognize that
there's still this ongoing responsibility, "
Shnitser says.
" Once a degree of outsourcing has
happened ... what employers would not
want to do is set it and forget it, " she says.
-Remy Samuels
Under 35 years old
Source: NEPC
35 - 44 years old
45 - 65 years old Over 65 years old
TIDBITS
It's Never Enough
A study has revealed that many Americans,
especially Millennials and Generation Z-41% and 43%,
respectively-suffer from " money dysmorphia, " which the
report called having a distorted view of one's finances
that could lead to poor decisions. Nearly half (48%) of Gen
Z and 59% of Millennials said they feel behind financially,
though many have more saved than the average
American. Of all Americans afflicted, 38% said it prompted
overspending, and 32% said it increased their debt.
Source: Intuit Credit Karma, with Qualtrics
The Target-Date Fund Landscape
Rise in TDFs' Popularity Causes Core Menus to Shrink
72%
Average % of plan assets in core menu
52%
47%
28%
2010
Average % of plan assets in TDFs
2012
2014
2016
2018
2021
TDFs' Appeal Wanes With Participants' Age
n % of participants 100% invested in a TDF
n % of contributions in TDFs
85%
72%
70% 68%
59% 59%
51% 53%
2023
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