The Best Argument for PEPs Isn’t About Cost 

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.”