Perhaps you’ve been hearing the recent talk around the water cooler about retirement plans.
Basically, the important thing to know is that employees want to have a great retirement plan available through their work. Employers have started to take note of this fact and, as a result, many companies now provide compelling retirement packages for their workers.
But as a small business, it can be extremely time consuming and difficult to manage a retirement plan effectively. Several businesses employ retirement planning services for their employees to solve this issue. However, in some cases, you just need a bit more help. This is especially true when one considers all the other hats a small business owner must wear.
Luckily, a solution to this issue has been developed in the form of a Pooled Employer Plan, or a PEP. These plans are different from standalone 401ks, but offer tons of benefits to everyone involved.
What is a Standalone 401k?
A standalone 401k is a retirement plan that is offered to members of one company. These plans are managed by the business owner and everything that happens within the plan is essentially the business owner’s responsibility.
The standalone 401k can provide some flexibility to contributing members. However, it comes with many headaches that can be alleviated with a Pooled Employer Plan.
What is a Pooled Employer Plan?
A Pooled Employer Plan, or PEP, is a 401k option that combines multiple different businesses into a single retirement plan. Often, these businesses are completely unrelated, but they all provide funds in order to have more money in the plan overall.
These plans are managed by what is known as a Pooled Plan Provider or PPP. These individuals make all of the important managerial decisions regarding the plan and also take care of any paperwork or deadlines that must be met with regard to government requirements, testing, etc.
Which is Better: A Pooled Employer Plan or a Standalone 401k?
It’s difficult to say which is the better choice for any single business. After all, every company has unique needs that must be considered when deciding on a retirement plan.
That being said, there are certainly many perks associated with a Pooled Employer Plan that can benefit both employers and employees.
For one thing, Pooled Employer Plans take the stress and responsibility off of the shoulders of business owners. Instead, the Pooled Plan Provider has to deal with all of the details and time-sensitive aspects of retirement plans.
Additionally, while there is slightly less flexibility for employees enrolled in a Pooled Employer Plan, there are plenty of learning opportunities and often lower costs associated with these plans.
As you can see, both employers and employees enjoy numerous benefits when they join a Pooled Employer Plan and drop their Standalone 401k.
Join a Pooled Employer Plan Today
If you are a small business owner who is looking for ways to attract and retain employees, consider joining a Pooled Employer Plan. These plans provide tons of benefits and cause minimal stress to employers. If you’re interested in learning more, contact a plan provider today!
