Pooled Employer Plan (PEP)

Definition

PEPs are a newer form of multiple-employer retirement plan enabled by the 2019 SECURE Act. They allow unrelated employers to participate in a single 401(k) plan with reduced administrative burden — the Pooled Plan Provider handles compliance and fiduciary duties.

PEPs compete with PEO 401(k) plans for the small-employer retirement market.

Common questions about Pooled Employer Plan (PEP)

What is Pooled Employer Plan (PEP)?

A retirement plan covering unrelated employers, enabled by the SECURE Act of 2019.

Why does Pooled Employer Plan (PEP) matter for PEO buyers?

PEPs are a newer form of multiple-employer retirement plan enabled by the 2019 SECURE Act.

How does Pooled Employer Plan (PEP) fit alongside other PEO concepts?

Most PEO buying decisions touch several related concepts at once. Pooled Employer Plan (PEP) typically comes up alongside the other terms in this category. Closely related terms include Multiple Employer Plan (MEP), 401(k) plan.

Multiple Employer Plan (MEP) — A retirement plan that covers employees of more than one unrelated employer — common in PEO 401(k) arrangements.
401(k) plan — A tax-advantaged employer-sponsored retirement savings plan that allows employees to defer wages on a pre-tax or Roth basis.

Browse the full PEO glossary

This is one entry from our PEO glossary covering payroll, benefits, workers comp, HR compliance, and PEO mechanics. Browse all terms.

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