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PEP adoption surges, but employers risk misunderstanding fiduciary duties
Cerulli Associates data show pooled employer plan counts more than tripled from 2021 to 2024, while Travelers warns some employers underestimate what fiduciary responsibility they still keep under ERISA after joining.
Pooled employer plans are growing quickly, but a persistent misunderstanding about fiduciary risk is emerging alongside the adoption push, according to Insurance Business America.
Cerulli Associates data cited by the outlet show the number of PEPs more than tripled between 2021 and 2024, with momentum accelerating especially among smaller employers that find the administrative and cost burden of sponsoring a standalone 401(k) plan prohibitive.
Insurance Business America reports that Travelers fiduciary product executive Wendy Von Wald says promotional materials often emphasize reduced fiduciary liability without equally highlighting the responsibilities employers still retain. Von Wald also noted that at least two school systems have created or explored PEPs, suggesting the interest is broad rather than limited to a single business segment.
The legal framework remains the same, the outlet notes, with the 2019 SECURE Act amendments to ERISA specifying that participating employers retain fiduciary responsibilities, including selecting and monitoring the pooled plan provider and maintaining fiduciary responsibility for investments and management of plan assets attributable to their own employees, to the extent not otherwise delegated.