As firms jostle for position in anticipation of the new market for pooled employer plans, one is racing ahead to try to gain an important distinction — that of being the nation's first provider of the plans.
Terrance Power, the president and self-described "PEP master" at The Platinum 401k Inc., the marketing arm of American Pension Services LLC — a $450 million Clearwater, Fla.-based third-party administration firm that Mr. Power founded — has already teamed up with Strategic Capital Advisers LLC, a $200 million retirement plan adviser firm in Springfield, Ohio, to launch a pooled employer plan on Jan. 1, 2021. The Platinum 401k team will serve as the pooled plan provider, or "P3," as well as the 3(16) plan administrator to the private-labeled PEP, Mr. Power said.
Large record keepers are also seen as well-positioned to offer a pooled employer plan, particularly those that already have multiple employer plan offerings. But so far, many of the largest aren't disclosing their plans.
"I would think that record keepers that already have that infrastructure — that would be a logical next step where they might see it as a good fit for their business," said Anastasia Krymkowski, associate director with Cerulli Associates' retirement practice in Boston.
In a survey of 23 record keepers last year, including eight of the top 10 largest firms, Cerulli found that 19% of the respondents viewed open multiple employer plans as a "high opportunity," with one-third seeing them as "somewhat of an opportunity." Some 38% saw them as a "low opportunity" and 10% said they were not applicable to them.
Fidelity, which has $2.4 trillion in assets under administration on its workplace retirement savings plan platform, says it plans to offer a "solution" by early 2021 but declined to provide additional details.
As Mr. Power tells it, the Strategic Capital Advisers pooled employer plan will serve as a model for other PEPs that he plans to replicate in the name of adviser firms across the country. In addition to Strategic Capital Advisers, Mr. Power said he has a dozen or so other advisers queued up to have a similar program established for their firms.
"Our phones have literally been ringing off the wall since Christmas with folks that want information," Mr. Power said, adding that he expects to have commitments from 40 to 50 firms by year-end.