Ascensus Hits $1B AUA in PEPs, Showing Continued Adoption

Ascensus, the third largest retirement plan provider for plans with less than $10 million in assets, has more than $1 billion in assets under administration in its 30 pooled employer plan offerings, the firm announced Wednesday.

The assets come from almost 650 plan sponsors adopting the option as their retirement plan, and they average almost $2 million in assets per company, according to Ascensus.

In some ways, PEP adoption has been gathering steam: Ascensus joins recordkeeper Aon PLC in reaching the threshold of more than $1 billion in assets, and Paychex Inc. reported a doubling of plan sponsors in its PEP over the past year to 25,000, though it declined to give assets under administration.

Yet the growth of listed PEPs has actually slowed in 2023, according to recent analysis by Robb Smith, president of RS Fiduciary Solutions, PEP-HUB and PEP-RFP. But plan sponsor use and asset growth have been burgeoning for some, as the much-discussed plan option continues to mature.

“We have seen a significant uptick in audited plans coming into our PEPs over the past 18 months,” Mindy O’Connor, head of retirement business development at Ascensus, said via email.

Adviser Partners

Ascensus’s PEP is offered to plan sponsors by partner advisories that include Creative Planning, UBS, Wealth Enhancement Group and others, according to the announcement.

“While Ascensus provides marketing and distribution support to our PEP partners, we closely collaborate to help millions save for a better future and take a synergistic approach in promoting growth of PEPs in the market,” O’Conner said.

PEPs, introduced with the Setting Every Community Up for Retirement Enhancement Act of 2019, are designed to take on the fiduciary and administrative burden for plan sponsors, as well as reducing cost, by leveraging a collective pool run by a pooled plan provider. Newport, owned by Ascensus, was one of the first PPPs to market in 2021.

“We’re delighted to achieve this milestone in our PEP partnerships, confirming our focus on growing this important offering,” Nick Good, Ascensus’s recently named president, said in a statement.

Newport acts as the PPP; 402(a) named fiduciary; 3(16) administrative fiduciary; trustee and custodian; recordkeeper and administrator; and participant servicer. Ascensus also offers 3(38) services and integration of other plan benefits, such as nonqualified savings programs. 

A PEP for 403(b)s

In a separate announcement Thursday, Ameritas retirement plans brought to market a pooled employer plan for 403(b) providers, giving what it called “the underserved nonprofit retirement plan market an option that is usually reserved for large companies.” The 403(b) PEP will offer nonprofits fiduciary oversight, compliance, administration, reporting and investment strategies, according to the company.

Ameritas will serve as the recordkeeper, LeafHouse as the 3(38) investment fiduciary and FiduciaryxChange as the PPP, according to the announcement.

“We can do the heavy lifting for nonprofits, giving a retirement plan option while they do what they do best,” Jim Kais, Ameritas executive vice president for retirement plans, said in a statement.

The firm brought a 401(k) PEP to market in June. In its announcement, the firm stressed the PEP as an option for both specialist 401(k) advisers and financial professionals to offer it to clients.

“What’s great about the new pooled employer plan from Ameritas is that both specialist advisors and generalist financial professionals can grow their practice while streamlining administration,” Scott Holechek, Ameritas institutional sales leader and pooled employer plan thought leader, said in a statement at the time. “With our flexible platform and managed account options, financial professionals can satisfy varying investment appetites and offer personalized plans.”