Advisers Embrace PEPs as Fiduciary Risk Reduction Strategy

The pooled employer plan market has been picking up steam, as advisers now view PEPs less as a constraint on flexibility and more as a tool to manage fiduciary risk, according to new research from Pentegra Retirement Services.

The report, “Advisor Perspectives on Pooled Employer Plans,” based on a January survey of 45 advisers, found that more than 80% of respondents said fiduciary risk mitigation was the leading factor shaping their positive perception of PEPs, which first became available in 2021. While standardization was once seen as a drawback, advisers now view it as a structural advantage that enhances defensibility in an increasingly litigious regulatory environment, according to the report.

“Advisers do not see PEPs as eliminating fiduciary responsibility, but rather professionalizing and reallocating it to institutions better equipped to manage it,” wrote Carlo Guerrera, Pentegra’s vice president of sales and key accounts, in an email to PLANADVISER.

Among advisers with clients participating in PEPs or utilizing Employee Retirement Income Security Act 3(16) fiduciary services, 75% reported measurable improvements in overall plan quality. Half said plan quality improved significantly following adoption, while an additional 25% saw moderate improvement. No respondents reported a decline in plan quality, and the remaining 25% said there was no noticeable change.

According to Guerrera, the survey showed that PEPs mitigated risk for advisers and plan sponsors, but in different ways.

“For plan sponsors … by outsourcing administrative and fiduciary functions to a pooled plan provider, employers reduce their exposure to compliance failures, operational errors and governance gaps—particularly if they lack internal retirement plan resources and expertise,” Guerrera wrote. “For advisers … respondents noted that working within a PEP structure enhances documentation, clarifies roles and aligns oversight with institutional processes—all of which are critical in a more scrutinized and litigious environment.”

Survey results also showed unanimous support for an integrated fiduciary model among advisers. All respondents said that having a single, integrated fiduciary partner combining 3(16) fiduciary services, PPP responsibilities and compliance expertise was either very important (71%) or extremely important (29%) to their practice.

This preference mirrors how employers have long approached health benefits management, according to an analysis by global advisory firm WTW. Employers routinely outsource complex administrative and compliance functions to carriers and third-party administrators, allowing them to focus on their core business while mitigating risk.

According to the analysis, PEPs allow employers to delegate most day‑to‑day plan management functions—including annual audits, hardship and loan approvals—and participant communications, streamlining operations while maintaining strong governance.

PEPs further simplify retirement plan compliance by shifting responsibility for requirements from ERISA, the IRS, the Department of Labor and new legislative requirements to the pooled plan provider, which manages testing, audits and regulatory filings on the employer’s behalf.

“PEPs are no longer being evaluated solely as a product innovation—they are being recognized as a structural solution to the realities of today’s retirement plan environment,” Guerrera wrote. “Advisers are prioritizing consistency, defensibility and professionalized fiduciary oversight, and PEPs are uniquely positioned to deliver on those expectations.”

The Pentegra 2026 Advisor Study on Attitudes Toward PEPs was conducted from January 2 through January 29 and included responses from 45 financial advisers in the U.S.