Small employers are interested in PEPs, survey finds

More than half of small employers are interested in learning more about pooled employer plans, or PEPs, whether or not they have a retirement plan already in place, according to a survey by the Secure Retirement Institute.

PEPs are a type of group 401(k) in which unrelated companies can participate together, with the goal of achieving economies of scale. They were first approved for use in early 2021.

According to the SRI research, small employers that are considering adding a defined-contribution plan are interested in learning more about PEPs, but small employers with a current plan are also interested.

Firms that aren’t interested in PEPs cited concerns that a PEP would provide a lower level of support for the firm (42%) or a lower level of service for workers (39%.) And almost 40% of those surveyed want to have control of decisions about the retirement plan’s design.

SRI said the concerns expressed about PEPs were relatively consistent among the different sizes of small businesses.

SRI surveyed 914 decision makers at businesses that have up to 99 employees in the fall of last year.

[More: More companies planning PEPs, with potential in auto-IRA states]