Principal Financial Group announced Monday that in response to the Setting Every Community Up for Retirement Enhancement (SECURE) Act, it is teaming up with other key service leaders to launch Principal EASE, a pooled employer plan (PEP) that combines integrated retirement plan administration, customer service and investment management capabilities. Principal will act as the pooled plan provider (PPP) and recordkeeper, and, as such, oversee the operation of the PEP. Principal says it will help the PEP meet regulatory requirements and help employers reduce administrative work.
Principal says it will be making its PEP available to financial professionals to offer employers in 2021.
“The workplace is such an effective place to increase access to retirement savings plans,” says Jerry Patterson, senior vice president of retirement and income solutions at Principal. “Our position as a leading service provider of retirement plans in the U.S. opens the door for Principal to provide input on legislative efforts, which remain focused on helping increase access to retirement plans for all American workers.”
Principal notes that only 55% of workers employed by small businesses with fewer than 100 workers have access to retirement benefits. Principal EASE is being targeted at startups and companies with up to $10 million in retirement plan assets. Principal says it will deliver a professionally managed approach to the PEP that will streamline decisions.
“By shifting liability to designated fiduciaries with specific knowledge and skills, employers benefit from investment management as well as reduced administrative tasks and risks,” Patterson adds.
National Benefit Services LLC (NBS) will act as the third-party administrator (TPA), and Wilshire as the investment fiduciary.
“We’re thrilled to team with NBS and Wilshire to help people feel more prepared and confident about their retirement,” Patterson says.
Principal says 38% of defined contribution (DC) plan sponsors say they might consider joining a PEP or a multiple employer plan (MEP) in the next two years.
Principal says it will continue to look to partner with other firms on additional PEPs.