Paychex has 1,000 clients for its PEP, company says
Most of the new PEPs clients have not previously offered a retirement plan to their employees, often because of the administrative burden of setting up a 401(k).
February 23, 2021
Human resources outsourcing firm Paychex has signed up at least 1,000 businesses for its pooled employer plan, the company said Tuesday.
The businesses are among the roughly 700,000 existing clients that use Paychex’s other services, such as payroll and human capital management, according to the firm. Most of the new pooled employer plan, or PEPs, clients have not previously offered a retirement plan to their employees, often because of the administrative burden of setting up a 401(k), said Michael Majors, senior director of national retirement sales at Paychex.
The Mechanics of Moving to a PEP
With a lack of regulatory guidance, plan sponsors can rely on certain existing rules to know the steps to take if they decide to move from a single-employer plan to a pooled employer plan.
Reported by
Art by Wenting Li
The goal of the provisions of the Setting Every Community Up for Retirement Enhancement (SECURE) Act that created pooled employer plans (PEPs) was to encourage employers that didn’t have retirement plans for employees to offer one. But employers that already sponsor a plan may also decide a PEP is a better choice for them and their participants.