TRA Select 401(k) PEP

A Pooled Employer Plan (PEP) is a special kind of retirement plan that allows multiple unrelated employers to join together and offer a retirement savings option to their employees.

Here are the key points about a PEP:

  1. Multiple Employers: Unlike traditional plans, a PEP is designed to include multiple unrelated employers and employees.
  2. Types of Plans: A PEP can be structured as a qualified defined contribution plan, like a 401(k) plan.
  3. Management: The entity responsible for managing the PEP is called a Pooled Plan Provider (PPP). This PPP can either be one of the employers participating in the plan or a completely separate organization. Examples of such organizations could be insurance companies, financial institutions, or other entities that meet specific legal and regulatory standards.
  4. Regulations: Both the PEP and the PPP must adhere to certain regulations and requirements set forth by the Internal Revenue Code to ensure the plan operates fairly and securely for all participants.

In summary, a PEP is a flexible retirement plan option that can be shared by multiple businesses, making it easier and potentially more cost-effective for them to offer retirement benefits to their employees. See below for more details.

Pooled Employer Plan (PEP)

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    What is a Pooled Employer Plan (PEP)?
    • Designed to benefit employees of two or more adopting employers, PEPs are qualified retirement plans that can be sponsored and offered only by a Pooled Plan Provider (PPP). Employers that adopt a PEP need not share a business nexus to form this group 401(k) Plan; thus PEPs are sometimes referred to as “open MEPs”.
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    What are the Key Characteristics of a PEP?
    • PPPs must meet the requirements outlined in ERISA Section 3(43) as well as other requirements outlined by the US Treasury Department.
    • A PPP must register with the US Secretary of Labor 30 days before beginning operations, and also satisfies the SECURE Act requirement that the PPP must register with the Treasury Department.
    • In addition to the PPP, there is a centralized 3(21) Investment Advisor and/or 3(38) Investment Fiduciary, as well as a 3(16) Plan Administrator.
    • A PEP is auditable only if it exceeds 1,000 eligible participants or a single adopting employer has more than 100 employees.
    • Employers adopting a PEP plan for their 401(k) may have challenges combining the 401(k) with a DefinedBenefit or Cash Balance Plan, depending upon the flexibilities the PEP will permit.
    • One Form 5500 is filed for the entire plan.
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    What are the Necessary Documents?
    • Plan Document — retained by the PEP Sponsor.
    • Adoption Agreement — Provides the provisions available in the PEP and retained by the PEP Sponsor.
    • Participation Agreement — Created for and signed by each adopting member to include the specific provisions of their retirement offering.
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    What are the Limitations of a PEP?
    • Fixed fund lineup — All adopting employers share one common fund lineup. Generally, the Plan Sponsor or Investment Fiduciary makes additions to or removals from the lineup; notification must be provided to all eligible individual participants.
    • Audit possibility — Although PEPs have a more lenient policy on audit requirements than MEPs, a PEP could still combine enough small plans and eligible participants to become auditable in a short span of time, which would impact costs adversely.
    • PPP fiduciary liability — Each adopting employer within a PEP retains fiduciary liability for the selection and monitoring of the PPP.
    • Accessibility — Any adopting employers, service providers and fiduciaries with a PEP can be removed from the plan by the PPP.
  • ▾
    What are the Benefits of PEPs Compared to Single-Employer Plans?
    • Significantly fewer administrative duties.
    • Lower costs through greater plan asset totals.
    • Mitigation of fiduciary responsibilities and liabilities.

Enhance Your Retirement Plan Offering with TRA Select 401(k) PEP

  • Are your clients searching for a retirement plan that attracts top talent while streamlining administration? The TRA Select 401(k) PEP is the perfect solution. This innovative retirement plan is the result of a strategic collaboration between The Retirement Advantage, Inc. (TRA), Empower, Envestnet, and American TCS, offering unparalleled value and simplicity.

    Benefit from a Partnership with Proven Success

    Many organizations find it challenging to provide a high-quality retirement plan. However, with the TRA Select 401(k) PEP, your clients can offer a cost-effective, practical retirement solution tailored to their organization’s needs. Leverage the expertise and experience of a leading retirement plan provider to navigate the increasingly complex legal and regulatory landscape, while offering your clients employees the resources they need to achieve their retirement goals.

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    Streamlined Administration

    TRA, a trusted leader in third-party 401(k) administration, handles the complexities of plan management, freeing you to focus on growing your clients business. Our expert services include:

    • Compliance and regulatory oversight
    • Contribution and distribution management
    • Comprehensive reporting
  • ▾
    Financial Empowerment for Employees

    Empower provides a personalized, user-friendly platform designed to improve financial wellness. With tools to manage savings, debt, and overall financial health, employees gain insights and resources that:

    • Support informed financial decisions
    • Foster a culture of financial independence
    • Boost satisfaction and retention
  • ▾
    Diverse Investment Options

    Envestnet offers a wide array of investment choices, including risk-based and target-date funds, enabling employees to tailor their portfolios to their needs and risk tolerance. This flexibility helps participants:

    • Optimize their financial strategies
    • Work toward their retirement goals with confidence
  • ▾
    Advanced Fiduciary Oversight

    American TCS delivers exceptional fiduciary services to ensure your plan adheres to all regulatory requirements. This rigorous oversight:

    • Mitigates risks associated with plan management
    • Protects plan assets
    • Offers peace of mind

The TRA Select 401(k) PEP Advantage

  • Simplified Plan Administration: We manage the day-to-day complexities so your clients don’t have to.
  • Customizable Investment Opportunities: Empower employees with a range of investment options to match their unique goals.
  • Comprehensive Financial Tools: Equip your team with resources to achieve financial independence.
  • Reliable Compliance and Integrity: Benefit from robust fiduciary oversight that protects your plan.

Build a Better Financial Future

With the TRA Select 401(k) PEP, you’ll gain:

  • Enhanced employee engagement and retention
  • Efficient plan management
  • A strategic partner invested in your success

Join the organizations that trust us to deliver superior retirement solutions.

Complete the form below today to learn more about the TRA Select 401(k) PEP and how it can help your organization thrive.

Let’s build retirement plan excellence together.

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