You know what everyone’s talking about lately in the retirement plan world? Pooled Employer Plans — PEPs! Yeah, PEPs. Like they’re the second coming of sliced bread. Spoiler alert: they’re not.
I’ve been talking to a bunch of TPAs, advisors, people in the know — and guess what? Most of us are scratching our heads. PEPs? Meh. They’re not bad, but let’s not throw a parade. And here’s the kicker: providers are diving into them like it’s a gold rush, and half the time, they’re getting the pricing completely wrong. You think you’re getting $100 million in assets, and suddenly it’s $3.42 and a stick of gum. It’s like buying oceanfront property in Nebraska — looks great on paper.
Now, is there an opportunity here? Sure, yeah. In theory. But the math has to work. You need enough assets to make it worth anyone’s while. Otherwise, you’re just stealing from your own single-employer plan business to prop up a shiny new PEP. That’s not growth — that’s just cannibalism in a suit.
The real value in these things? Outsourcing fiduciary duties. That’s the pitch. Not the pricing. Let’s be honest — most PEPs aren’t saving anyone real money. Maybe a few bucks, a couple slices of pizza. That’s not a game-changer. That’s lunch.
Bottom line: PEPs are gonna be a niche thing. And only the ones who get that — the ones who focus on bundling assets like it’s a Costco run — they’re the ones who’ll survive. Everyone else? Eh. Good luck.
