Aon will begin offering a pooled employer plan effective Jan. 1, the company said Wednesday.
Employers in unrelated businesses will be able to join the pooled 401(k) plan, a new type of multiple employer plan made possible under the SECURE Act, which passed in December.
The anticipated pooled employer plans are seen within the industry as a way to help employers offload many of their fiduciary responsibilities, reduce administrative duties and lower retirement plan costs through economies of scale. They are scheduled to become available starting Jan. 1.
"We believe PEPs will transform the retirement landscape, similar to how 401(k) plans transformed the pension landscape 40 years ago," said Paul Rangecroft, North America retirement practice leader for Aon, in a news release. "We are thrilled to enter this important market and are pleased to provide this plan as a service to employers as they look to increase efficiency, reduce risks and most importantly create better retirement outcomes for participants."
Aon will serve as the provider of the pooled plan with Aon Investment Services USA Inc., the company's investment services group, serving as a 3(38) fiduciary adviser. The company selected Voya Financial as the record keeper for the plan after a competitive bid process.
Aon's PEP is aimed at a broad range of small to midsize employers in different segments and industries, said Rick Jones, a senior partner at Aon. The target market has at least 100 employees and assets of $10 million to $20 million.
"Aon has relationships with many of those organizations broadly, and we're anxious to roll out a PEP solution more broadly across Aon's client base," he said in an interview.
While it's too early to enlist employers to join the pooled plan, Aon has had a fair number of conversations with prospective organizations already, Mr. Jones said. "There's been some pretty broad interest."
