Preparing Clients for PEP Adoption: Key Considerations for Advisors

Preparing clients for a successful move to a PEP

Advisor and plan sponsor conversations about PEPs are becoming increasingly common. With more than 80%1 of mid-sized, large, and mega-sized plan sponsors reporting interest in PEPs, and over half saying they are very interested in exploring the PEP structure as a retirement plan option. For many advisors, the question is no longer whether clients are aware of PEPs, but whether they are prepared to evaluate one effectively.

But before discussing providers, plan structures, or implementation details, advisors should help clients define what success looks like in a pooled retirement plan and identify the priorities that will ultimately shape the decision.

Research shows that employers are primarily drawn to PEPs and MEPS for operational and governance-related reasons, not cost savings. Among plan sponsors interested in a PEP, the most frequently cited factors were reducing the time and effort spent administering the plan (26%), improving service and support (24%), and outsourcing investment fiduciary responsibilities (21%). By comparison, lower investment fees (11%) and lower administrative fees (9%) ranked much lower on the decision-making list¹.

For advisors, that distinction matters. A productive PEP discussion should focus less on cost savings and more on operational challenges, retained responsibilities, and desired outcomes.

PEP discovery questions advisors can use to guide the discussion:

• What objectives is the client hoping to achieve?
• Which administrative challenges are currently creating issues?
• How important is fiduciary support and oversight?
• What outcomes matter most to employees?
• What responsibilities is the employer comfortable retaining?
• How will success be measured after a transition to a PEP?

Starting with these questions can help uncover priorities that may influence plan design decisions, governance discussions, employee communications, and overall PEP readiness. It also helps ensure that the conversation remains focused on client goals rather than the plan structure itself.

Key PEP plan design considerations to discuss early

The decision to join a PEP is not simply about changing plan structure. It's also about determining how the retirement plan should support the organization, its workforce, and their desired outcomes. Fortunately, advisors can help determine how the plan should be structured to support long-term success.

Aligning plan design with client and workforce needs

Different priorities often lead to different plan design decisions. Understanding the PEP fit signals and the client's priorities early can help advisors identify which features may deserve additional discussion.

As you can see, plan design decisions can influence more than administration. According to research from the Georgetown University Center for Retirement Initiatives, workers are 15 times more likely to save when they have access to a workplace retirement plan and 20 times more likely to save when automatically enrolled².

Joining a PEP is only part of the equation. Plan design decisions can significantly influence employee participation, engagement, and retirement readiness.

Evaluating contribution, eligibility, and vesting decisions

Once priorities have been identified, advisors can help clients understand how different provisions work together and the tradeoffs they may create.

Key discussion areas often include:

• Employer match versus profit sharing
• Safe harbor considerations
• Eligibility timing
• Vesting schedules
• Workforce demographics
• Budget flexibility

For example, a client focused on increasing participation may prioritize automatic features and matching contributions, while an organization emphasizing retention may place greater value on vesting schedules and employer-funded contributions. Similarly, businesses seeking administrative simplicity may prefer standardized eligibility provisions and streamlined payroll integration.

The goal isn't to choose the most features. It's to make sure the plan design supports the client's goals, workforce needs, and desired outcomes. By discussing these considerations early, advisors can help clients make more informed decisions and move forward with greater confidence.

Common client questions about moving forward with a PEP

Before moving forward, clients typically want to understand how a PEP may affect employees, ongoing responsibilities, and their overall retirement plan strategy. Guiding these discussions early can help advisors create clarity and build confidence throughout the evaluation process.

What responsibilities will employers still have?

One of the most common misconceptions about PEPs is that employers completely hand off fiduciary and administrative responsibility. In reality, while a PEP can significantly reduce the day-to-day burden of sponsoring a retirement plan, it does not eliminate employer responsibilities altogether. In fact, employers retain the very important fiduciary responsibility of selecting and monitoring the pooled plan provider (PPP). Then, depending on the PEP structure and service arrangement, they may also continue to be responsible for activities such as submitting timely payroll contributions and maintaining accurate employee and census data.

This discussion is especially important because many clients are evaluating PEPs to simplify plan administration. Helping them understand which obligations shift and which remain can prevent surprises later.

How could a PEP affect employees?

Clients are often focused on administrative and fiduciary considerations, but employee impact should also be part of the conversation. Plan design decisions related to eligibility, contributions, automatic features, investment options, and participant resources can all influence how employees experience the retirement plan.

Questions worth exploring include:

• How could plan changes influence participation and savings behavior? 
• Could automatic features help employees save more consistently? 
• What impact might contribution decisions have on retirement readiness? 
• How could changes to participant resources, investments, or digital experiences affect employee engagement?

Employee outcomes should remain part of the evaluation process, particularly when changes affect participation, savings behavior, or retirement readiness.

What changes with a PEP compared to the current plan?

For clients transitioning from an existing plan, understanding what changes and what stays the same can help reduce uncertainty.

In many cases, employees may notice little day-to-day difference, while employers experience the greatest changes through plan governance, administration, and fiduciary oversight.

Transitioning clients from an existing retirement plan to a PEP

For many employers, joining a PEP is less about adding a retirement plan and more about changing how the plan is managed and supported. In fact, much of the recent growth in the PEP market has come from employers transitioning existing retirement plans rather than establishing new ones³.

Preparing PEP stakeholders and evaluating the current plan

Before making a recommendation, advisors should ensure key questions have been addressed, and stakeholder expectations are aligned. A strong transition conversation often starts with questions such as:

• What's working well in your current plan?
• Where are your biggest administrative challenges?
• What aspects of the current retirement plan experience are most important to preserve?
• How will leadership define success after a transition to a PEP?
• What employee communications may be needed along the way?

Approaching the transition as a planning exercise rather than an implementation project can help uncover potential concerns early, align stakeholder expectations, and build confidence before any decisions are made.

Explore Pooled Plan Adoption Examples Advisors Can Use

Helping clients move forward with confidence

Before making a recommendation, advisors should be confident that key questions have been addressed, and stakeholder expectations are aligned. For advisors, that means it's time to bring it all together.

A PEP adoption checklist for advisors

Before recommending or transitioning to a PEP, advisors should confirm that these key considerations have been thoroughly evaluated and discussed with the client:

• Have the client's primary goals and priorities been clearly defined?
• Have key plan design decisions been evaluated, including contributions, eligibility, vesting, and automatic features?
• Does the proposed plan design align with the organization's workforce and desired outcomes?
• Have ongoing employer responsibilities been discussed and understood?
• Has the potential impact on employees been evaluated?
• Have key stakeholders been aligned on expectations?
• Does the client have any remaining questions or concerns?   

Move from pooled plan interest to informed decisions

PEPs can provide meaningful advantages for some employers, particularly those looking to streamline administration, enhance support, or reduce certain fiduciary responsibilities. At the same time, no two organizations evaluate retirement plans through the same lens.

That's why the advisor's role in potential PEP adoption remains so important. Beyond explaining how a PEP works, advisors can help clients navigate the decisions that determine whether it aligns with their needs. When clients understand both the opportunities and responsibilities involved with a PEP, they are better positioned to make decisions with confidence rather than uncertainty.

Learn more about the Ascensus PEP Rally

Partner with Ascensus to support PEP conversations

Pooled plans represent an exciting advisor opportunity, but the strongest PEP recommendations are built on informed conversations. Through PEP Rally, Ascensus helps advisors navigate plan design, fiduciary considerations, participant outcomes, and retirement plan strategy with greater confidence.

Connect with us to explore how you can bring clarity, confidence, and forward momentum to your clients.

¹Cerulli Associates, The Cerulli Edge: The State of PEPs, U.S. Retirement Edition, 2Q 2026.
²Georgetown University Center for Retirement Initiatives, Pooled Employer Plans (PEPs): Five Years of Growth, Market Evolution, and the Opportunities and Challenges Ahead, 2026
³Georgetown University Center for Retirement Initiatives, Pooled Employer Plans (PEPs): Five Years of Growth, Market Evolution, and the Opportunities and Challenges Ahead, 2026.