As Principal Financial Group rushes to market its new pooled employer plan to sponsors of small 401(k) plans, it is looking to advisers to take a leading role in raising awareness of the option.
It already has gotten 14 of the largest broker-dealer firms — the majority of its distribution partners — to make its PEP available to their roughly 7,200 advisers, said Joni Tibbetts, vice president of product management in retirement and income solutions at Principal in Des Moines, Iowa.
"Putting this product on the shelf of the adviser's firm to be able to use is another quiver that the advisers can talk about," she said.
Pooled employer plans, such as the one Principal is rolling out, give employers in unrelated businesses the opportunity to combine their 401(k) plans into a single pooled plan, a move meant to lower plan costs and reduce sponsors' administrative and fiduciary responsibilities. The new type of pooled plans began coming online on Jan. 1, as specified in the SECURE Act, which greenlighted their creation.
Principal's decision to move aggressively into the fledgling PEP market was driven by the fact that it is a top provider of plans under $10 million, the segment of the plan sponsor market with the most to gain from a pooled plan, Ms. Tibbetts said.
"We wanted to make the choice available," she said.
Principal's new pooled employer plan, which launched on Jan. 1, was specifically built for small plan sponsors with up to $10 million in assets as well as employers with no plan at all. Named “EASE” to reflect the ease with which the PEP is administered, the PEP packages all the plan administration, investment management, trust and other services into a single offering. If not for the packaged offering, employers would typically buy the services separately and provide their employees a stand-alone 401(k) plan.
“It’s just a way to make it easy,” Ms. Tibbetts said.