The reason why PEPs pop for some employers may surprise you.

Pooled employer plans were created through the Secure Act of 2019 with the goal of reducing the cost and administrative burden associated with adopting a retirement plan. Both features would seem like an effective pitch for small- and mid-sized businesses thinking about offering or updating their retirement benefits. But in the experience of one large regional bank, the theme of simplified plan management has proven to be more effective.

“Our original message about PEPs had more to do with the opportunity to reduce costs than anything else,” said Jeff Douglas, head of KeyBank Institutional Advisors, which entered the market in 2024. “What ended up happening is that traditional plan providers with significant scale would just lower their pricing to match our offering. We’ve since found a lot more success talking about the time-saving benefits of outsourcing.”

A Fast-Growing Market

Research from the Center for Retirement Initiatives at Georgetown University shows PEPs accumulated more than $20 billion in assets and served roughly 1.6 million savers by the end of 2024, the latest year for which comprehensive Form 5500 data is available. Total PEP assets are expected to surpass $30 billion when 2025 year-end data become available, representing a roughly 50% year-over-year increase.

Both the CRI research and Douglas’ anecdotal experience suggest most of the growth has come from employers who already had a retirement plan and migrated their existing assets into a PEP, not from employers who did not offer a plan.

“A lot of these adopting employers are small- and mid-sized companies led by executive teams that just have a lot on their plate,” Douglas said. “Once they pass 100 participants and an annual plan audit becomes mandatory, a PEP can save them literally hundreds of hours a year in administrative work. That resonates.”

At this stage, KeyBank’s PEP business represents about 30 participating employers and about $400 million in assets. That’s significantly smaller than some providers, per data from Plansponsor’s 2025 Recordkeeping Survey:

• Transamerica had some 1,797 participating employers in its PEP offerings as of year-end 2024.
• Ameritas had 1,102, while Fidelity Investments was third, with 981 employers.

Who Gets PEPs? There’s not really one industry or sector where PEPs are resonating the most, Douglas said. “One trend we see is when a new executive team or a new head of HR takes over leadership of the company, maybe as a next-generation leadership transfer, and they’re interested in making a change,” he said. “If the new leadership isn’t very interested in managing a fund lineup and assuming that fiduciary risk, the PEP can be very appealing.”

Yogis may advise you to live in the moment, but a financial advisor is likely to recommend considering the future.

That can be hard to do for something as intimidating as saving enough for retirement. Older generations tend to feel more confident than younger ones in managing their current finances, according to a recent survey from Edward Jones and Gallup of more than 5,000 adults. That’s no surprise, seeing as they have years of experience finessing their budgets and weathering market downturns. But when it comes to future financial needs, the gap shrinks: 26% of Gen X respondents in the US said they had a “great deal” of confidence, which is the same for Gen Zers and just one percentage point above millennials. While 37% of baby boomers said they were confident in managing their future financial needs, that’s significantly less than the 54% who said the same about their current financial needs.

Part of what makes long-term planning so hard is that our future self can feel like a stranger, said Jamie Bosse, senior advisor at CGN Advisors. “It’s much easier to prioritize the needs and wants of the person you are today than to give up money today for someone you may not even be able to picture clearly 20 or 30 years from now.”

Mindful Moves

Another reason future finances can take the backseat is that today’s costs are high for everything from housing and childcare to groceries and insurance. “Everyday expenses get prioritized because they show up as a bill with a due date, and retirement never does,” said Juan Hernandez-Ariano, principal at WealthCreate.

But there are steps you can take to shift your mindset:

• Hernandez-Ariano recommended turning retirement savings into a monthly payment that leaves the paycheck before anything else gets decided, which many already do via a 401(k). Gradually increase how much you save over time. “The easiest time to raise it is when another payment ends, like a student loan that’s finally paid off, because the household has already been living without that money,” he added.
• Bosse suggested making your future feel more tangible. “Instead of thinking about retirement as some vague point in the distant future, picture what you actually want that life to look like,” she said.

Too Much Prep? Squirreling away every dollar isn’t the answer. “The goal isn’t to stop enjoying your life now,” Bosse said. “It’s to make sure your future self is included in the financial decisions you’re making today.”

Saving for retirement is in vogue, and the numbers are there to prove it.

Retirement assets surpassed $51 trillion at the end of the second quarter of this year, accounting for a third of all household financial assets, according to recent data from the Investment Company Institute. Funds in individual retirement accounts grew the fastest, up nearly 10% from the first quarter, while assets in defined-contribution plans came in a close second, growing 8.7% to $15 trillion, and government defined-benefit plan assets increased 5%, to just over $10 trillion. The uptick is driven by economic factors — like the ever-rising cost of living driving more Americans to save in the first place — to policy changes at the federal level leading more employers to offer plans.

“It has become more on the employers, where they have to have the plan in place,” said Will Hackler, director of retirement plans at Integrated Partners. “Some employees are getting smarter and saying, ‘OK, you have a plan. That’s great, but how much are you matching? How much are you contributing toward it?’”

Mandate Nation

Part of what’s driving the surge in retirement savings this year is tax credits from the SECURE Act, which allows small businesses to get up to $16,500 in tax benefits when they set up retirement plans with automatic enrollment for their employees. The act was important in making retirement planning a dinner-table conversation, Hackler said, rather than something reserved for practiced investors. State-level mandates have also played a role, as more and more states are requiring employers that don’t offer their own plans to join state-run account IRA deferral programs. “A lot of companies are implementing 401(k) plans [with] mandated auto-enrollment. When they established plans in the past, we saw somewhere in the neighborhood of two-thirds of the employees would enroll,” Hackler said. “Now, with auto-enrollment, the numbers are over 90%.”

Other findings from the ICI report:

• Mutual funds remain the prominent vehicle for households’ individual account-based retirement savings, making up 46% of the assets held in IRAs and defined-contribution plans.
• Of the total $15 trillion in employer-sponsored DC plans, $10.8 trillion was in 401(k)s, with the rest split between other private-sector plans ($920 billion), 403(b) plans ($1.6 trillion), 457 plans ($585 billion) and the Federal Thrift Savings Plan ($1.2 trillion).

Hard-Earned Benefits. The benefits of retirement plans don’t come without a little work, though. Less than 6% of employers are applying for the tax credits that come with offering a plan, according to an Integrated Partners survey. Plan participants should also ensure they’ve named beneficiaries, Hackler said.

“[Retirement investors] start accumulating the money, but they never take the step of doing the beneficiary forms,” he said. “And because we’ve had this for a number of years, the rates of people filling it out are less and less … It becomes a big problem for the employer tracking people down.”