Small Business Retirement Plans

A Pooled Employer Plan (PEP) is a type of retirement savings vehicle that allows multiple unrelated employers to offer a 401(k) plan for their employees where most of the plan administration is outsourced. PEPs were introduced as part of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which became law in the United States in 2019. The goal of PEPs is to make it easier and more cost-effective for small- and medium-sized businesses to offer retirement benefits to their employees, while helping individuals close the retirement gap.

The biggest difference between pooled and single-employer retirement plans is control. In general, single-employer plans are more flexible than PEPs since the employer has total control over plan decisions. Because of this, employer responsibility is high and can be costly and time consuming to administer. While a PEP has promise in reducing administrative and operational burdens, the employer may have less flexibility with respect to certain plan design features and choice of service providers.

Advantages of HUB Retirement Select PEP

Cost Efficiency: Administrative expenses are shared among all participating businesses giving employers potential cost efficiencies compared to single employer retirement plans.

Administrative Ease: HUB and our professional partners handle most of the plan management and paperwork, allowing you the time and freedom to get back to running your business with less administrative stress and risk than is typically associated with traditional 401(k) plans. Payroll integration capabilities make it even easier for employees to save for retirement.

Less Fiduciary Risk: Because the Pooled Plan Provider assumes most fiduciary responsibilities, employers are not subject to the same level of liability. Sharing fiduciary responsibilities with seasoned experts can potentially decrease the employer's fiduciary liability exposure, with professionals assuming key legal responsibilities related to the plan.

Access to Retirement Specialists: Typically, financial services providers with specialized knowledge in retirement plan management and compliance are integral to PEPs. When you work with HUB, you’ll have ready access to a wealth of knowledge to ensure regulatory compliance and minimize the risk of errors.

¹ 401(k) Specialist, “Employees See 401(k) Plans as Prerequisite Instead of Perk,” accessed February 22, 2024.
² ADP, “Retaining Top Talent: How Retirement Plan Benefits can help boost employee loyalty,” accessed March 11, 2024.
³ American Society of Pension Professionals & Actuaries, “Where Credit Is 'Due': Tax Credits for Small Employer Plans Under SECURE 2.0,” accessed March 7, 2024.

Disclosures:
HUB Retirement and Private Wealth employees are Registered Representatives of and offer Securities and Advisory services through various Broker Dealers and Registered Investment Advisers, which may or may not be affiliated with HUB International. Insurance services are offered through HUB International, an affiliate. Participation in HUB Retirement Select does not guarantee investment success. All investing involves risk, including possible loss of principal. There can be no assurance that any financial strategy will be successful.

This information is provided for general information purposes only. HUB International makes no warranties, express, implied or statutory, as to the adequacy, timeliness, completeness or accuracy of information in this document. 3(38) Advisory services for HUB Retirement Select PEP are offered through Global Retirement Partners, LLC, an SEC registered investment advisor and wholly owned entity of HUB International. Statements concerning legal matters should be understood to be general observations and should not be relied upon as legal advice, which we are not authorized to provide.

PEPs aim to simplify the process of offering retirement plans for small businesses and enhance access to retirement savings options for employees by leveraging shared resources and responsibilities. Essentially, PEPs enable smaller businesses to access the benefits of scale that larger employers can with a traditional 401(k).

In a PEP, a designated Pooled Plan Provider and 3(16) fiduciary assumes fiduciary responsibilities – overseeing plan administration, compliance and investment management on behalf of all participating employers. Employees contribute to the PEP and the plan's assets are invested collectively, fostering economies of scale and potentially improving investment outcomes. Employers can contribute match and profit sharing in addition to the employee contributions.

For HUB Retirement Select PEP, we work in partnership with Sallus Retirement, an independent Pooled Plan Provider (PPP) who serves as the lead fiduciary, and Ubiquity Retirement + Savings, an independent retirement plan provider and recordkeeper. HUB provides the investment management services.

Advantages of HUB Retirement Select PEP

Cost Efficiency: Administrative expenses are shared among all participating businesses giving employers potential cost efficiencies compared to single employer retirement plans.

Administrative Ease: HUB and our professional partners handle most of the plan management and paperwork, allowing you the time and freedom to get back to running your business with less administrative stress and risk than is typically associated with traditional 401(k) plans. Payroll integration capabilities make it even easier for employees to save for retirement.

Less Fiduciary Risk: Because the Pooled Plan Provider assumes most fiduciary responsibilities, employers are not subject to the same level of liability. Sharing fiduciary responsibilities with seasoned experts can potentially decrease the employer's fiduciary liability exposure, with professionals assuming key legal responsibilities related to the plan.

Access to Retirement Specialists: Typically, financial services providers with specialized knowledge in retirement plan management and compliance are integral to PEPs. When you work with HUB, you’ll have ready access to a wealth of knowledge to ensure regulatory compliance and minimize the risk of errors.

¹ 401(k) Specialist, “Employees See 401(k) Plans as Prerequisite Instead of Perk,” accessed February 22, 2024.
² ADP, “Retaining Top Talent: How Retirement Plan Benefits can help boost employee loyalty,” accessed March 11, 2024.
³ American Society of Pension Professionals & Actuaries, “Where Credit Is 'Due': Tax Credits for Small Employer Plans Under SECURE 2.0,” accessed March 7, 2024.

Disclosures:
HUB Retirement and Private Wealth employees are Registered Representatives of and offer Securities and Advisory services through various Broker Dealers and Registered Investment Advisers, which may or may not be affiliated with HUB International. Insurance services are offered through HUB International, an affiliate. Participation in HUB Retirement Select does not guarantee investment success. All investing involves risk, including possible loss of principal. There can be no assurance that any financial strategy will be successful.

This information is provided for general information purposes only. HUB International makes no warranties, express, implied or statutory, as to the adequacy, timeliness, completeness or accuracy of information in this document. 3(38) Advisory services for HUB Retirement Select PEP are offered through Global Retirement Partners, LLC, an SEC registered investment advisor and wholly owned entity of HUB International. Statements concerning legal matters should be understood to be general observations and should not be relied upon as legal advice, which we are not authorized to provide.