Financial firms expand pooled retirement plans for small employers

• Key Insight: Learn how pooled employer plans scale retirement access for small nonprofits and employers.  
• What’s at Stake: Smaller organizations risk losing talent if retirement offerings remain fragmented and costly.  
• Supporting Data: PEP market nearly $11 billion across 210 plans, 24,000 employers, 1.1M participants.  
  Source: Bullets generated by AI with editorial review

Finance companies are expanding their offerings of pooled employer plans, a relatively new 401(k)-style retirement arrangement that allows multiple small businesses and nonprofits to participate in a single, jointly administered system.

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Equitable, a life insurance and retirement services company, announced earlier this month that it was rolling out a new 403(b) plan designed for nonprofit employers. 

“Nonprofit leaders pour everything into the people and communities they support, but most don’t have the resources or time to manage a retirement plan,” said Jim Kais, head of group retirement at Equitable. “They recognize how important these benefits are for attracting and keeping talent, and this new solution gives them a practical way to offer a high‑quality retirement plan while we handle the details behind the scenes.”

Pooled employer plans, or PEPs, are designed to remove barriers from offering retirement benefits, such as high costs, fragmented service models and fiduciary risk. In a PEP, fiduciary responsibility is shared between the pooled plan provider and the participating employers.

Pooled employer plans were created as part of the SECURE Act, which was signed into law in December 2019, with the first PEPs becoming available in 2021. Since then, the PEP market has grown to nearly $11 billion in assets across 210 PEPs, encompassing 24,000 employers and 1.1 million PEP participants, according to Pacific Life. 

Luigi Andriani, head of product for group retirement at Equitable, said access to retirement plans is uneven in the nonprofit sector for many of the same reasons small employers struggle to offer them.

“Many nonprofits operate with very lean teams,” Andriani said in an email interview. “Because of this, nonprofit leaders often assume that offering a retirement plan isn’t cost‑effective or practical at their size.  Many smaller nonprofits also depend on variable funding sources such as donations, grants, and volunteer support. That kind of income uncertainty can make it difficult to commit to the ongoing administrative, fiduciary, and contribution responsibilities that come with maintaining a retirement plan.” 

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When employers switch from a traditional retirement plan such as a 401(k) to a PEP, the most meaningful gains they see typically come from reduced administrative burden and more competitive investment pricing, Andriani said. 

“While the exact savings vary, many nonprofits experience both hard‑dollar savings and soft‑dollar efficiencies — less staff time spent on compliance, fewer external partners to coordinate, and fewer unexpected issues around audits or regulatory filings,” he said. 

PEPs get Department of Labor support

Keybank, headquartered in Cleveland, Ohio,  began offering PEPs in 2023, and since then the financial institution has grown to over $250 million in assets across 17 employers. 

“Each year it’s doubling, and it’s moving quite well,” said Jeff Douglas, head of institutional advisors at Keybank. “We feel really good about where we are and really collecting on the seeds that we’ve sown over the last couple years.”

Most of Keybanks’s PEP clients are small to mid-sized employers with 100 to 500 employees. The process of helping a company switch from a traditional retirement plan to a PEP takes around 90 days, Douglas said, adding that some transitions can happen faster, but others take longer when complications arise such as delays from prior recordkeepers, payroll integration issues or other coordination challenges.

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When Keybank began offering PEPs, there was some skepticism around whether they would stick and gain traction, and Douglas said the company spent much of the first year convincing employers the model was viable. 

Momentum for PEPs has since built as the U.S. Department of Labor has issued ongoing guidance — most recently in 2025 — clarifying their use and fiduciary framework for small and midsized employers.

 “It’s simpler, safer and more cost effective,” Douglas said.