- Pooled Employer Plan (PEP) from industry leaders supports talent retention and attraction for business owners with easier access to a qualified retirement plan and protected income investments
Today, Lincoln Financial Group announced it is enhancing its retirement plan options by launching a pooled employer plan (PEP), OpenPEP, in collaboration with NPPG Plan Professionals, an affiliate of National Professional Planning Group, Inc. (NPPG) and Morningstar Investment Management LLC, a subsidiary of Morningstar, Inc. OpenPEP offers enhanced personalization through customized plan design options and qualified default investment alternatives, and is differentiated in the market by offering in-plan guaranteed income as an investment option.
“Too many working Americans aren’t saving for retirement because they don’t have access to an employer-sponsored plan, which we believe is going to have serious economic and social consequences in the future unless we fix it”
In today’s competitive talent market, it is more important than ever for businesses to offer a competitive benefits package, including employer-sponsored retirement plans, to attract and retain top talent. In fact, nearly three quarters (74%) of employees at small businesses say that having an employer-sponsored retirement savings plan is a “must have” or very important when considering an employer.1 There is also significant consumer interest in retirement plans that help convert savings into lifetime income, with more than 70% of retirement plan participants saying they are interested in an in-plan investment option that would provide guaranteed income for life.2
“The SECURE Act brought new opportunities for our industry to help address the retirement plan coverage gap by making it easier and more cost-effective for employers to offer these critical savings vehicles to their employees through a PEP,” said Ralph Ferraro, senior vice president, Retirement Plan Products and Solutions, Lincoln Financial Group. “Financial security and guaranteed income are increasingly important for employees, and through OpenPEP Lincoln is providing small business owners with a competitive advantage, while giving their employees confidence in a more secure financial future.”
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Personalized Investment Options and Guaranteed Income for Life
When joining OpenPEP, employers have the flexibility to personalize their plan with customized plan design options and qualified default investment alternatives (QDIAs). The target date solution for OpenPEP is YourPath® target-date plus risk portfolios, built with BlackRock® iShares. In addition, clients can elect to use Lincoln PathBuilderSM Income powered by YourPath® or Stadion’s Storyline Managed Account as their QDIA option. Stadion’s managed account service offers personalized investment portfolios based on individual participant factors. OpenPEP also provides the employer with reduced administrative burden and liability by outsourcing the administrative and investment fiduciary responsibilities.
Lincoln PathBuilder Income offers a differentiated PEP feature in the marketplace in-plan guaranteed income, which enables participants to protect their savings and know that they will also last their lifetime.
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The Benefits of Joining a PEP
Through the benefit of group purchasing power, employers who join a PEP can offer a qualified retirement plan for their employees, with fewer administrative and fiduciary responsibilities than a traditional plan. This enables business owners to offer this important benefit without needing to take their focus away from their day-to-day work of running their business. NPPG, a Pooled Plan Provider (PPP), acts as the lead sponsor and Morningstar Investment Management builds and manages the investment lineup of the PEP as the 3(38) investment provider.
“The shifting of administrative responsibilities and liabilities along with cost savings as a result of economies of scale are driving business owners to join a PEP,” said Michael M. Salerno, founder and CEO of NPPG. “The PEP provides adopting employers the opportunity to leverage pooled buying power for administrative costs and other outsourced professional services. By joining OpenPEP, employers reduce administrative and fiduciary burdens associated with retirement plan management, thus, allowing the company to concentrate on strategic growth initiatives while attracting company talent.”
“Too many working Americans aren’t saving for retirement because they don’t have access to an employer-sponsored plan, which we believe is going to have serious economic and social consequences in the future unless we fix it,” said Brock Johnson, president of Global Retirement and Workplace Solutions at Morningstar Investment Management. “We feel strongly that PEPs like Lincoln’s OpenPEP will help us close this access gap and are excited to be part of the innovation that is happening in this space.”
Employers get access to a fully integrated recordkeeping platform and a personalized plan website by joining the PEP, which gives them access to plan- and employee-specific information as they keep track of employees’ progress and retirement readiness scores. And while the government recognizes the PEP as if it were a single plan, each employer who adopts the plan may select its own provisions and tailor the plan to help meet the unique goals and needs of their employee population.
For employees, there are benefits beyond a vehicle to save for their future — Lincoln WellnessPATH, an online tool, helps savers get a holistic view of their financial wellness. This personalized, interactive online tool provides actionable content, one-on-one support and budgeting tools to help plan participants navigate key financial topics including spending, saving, debt and protection.
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