Products December 10, 2020

Paychex Introduces a Pooled Employer Plan

The firm says the PEP will reduce fiduciary liability for employers.

Reported by

In response to the provisions of the Setting Every Community Up for Retirement Enhancement (SECURE) Act, Paychex will sponsor and maintain a pooled employer plan (PEP). Paychex’s goal is to make a cost-effective retirement plan available to all businesses nationwide. The Paychex PEP will include reduced fiduciary liability for employers, simplified plan management and reduced plan expenses, when compared with single-employer retirement plans.

“Not only has the COVID-19 pandemic made business more complex than ever before, [but] it’s significantly impacted the financial security of millions of Americans,” says Tom Hammond, vice president of corporate strategy and product management at Paychex. “Expanding retirement plan access is critical to the long-term financial well-being of workers nationwide. Our new PEP will provide business owners with a cost-effective plan option that relieves the compliance and administration burdens of a traditional 401(k) plan, giving their employees access to a robust retirement plan benefit and allowing them to confidently prepare for their financial future.”

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Paychex notes that PEPs are a good solution in particular for small to mid-sized businesses that may have been unable to previously offer a retirement plan due to the cost, time and resources involved.

The Paychex PEP also offers greater levels of efficiency, as it can be integrated with the Paychex payroll. Paychex will also administer the required independent financial audit to comply with IRS and Department of Labor (DOL) requirements, which can cost large employers between $10,000 and $15,000 annually.

“For 10 consecutive years, Paychex has been named the No. 1 recordkeeper in the country by a number of plans, according to PLANSPONSOR Magazine,” Hammond adds. “As the industry leader, we’re uniquely qualified with the experience, the technology and resources to be the provider of choice for this new type of plan.”

Mesirow Financial will serve as the 3(38) investment manager of the PEP, and Mid Atlantic Trust Co. will serve as the trustee.

Paychex plans to make its PEP available starting January 1, the first day on which PEPs can be offered.

Products December 10, 2020

Vestwell Partners With Envestnet on 3(38) Services

The services will now be available to Vestwell advisers.

Reported by

Vestwell has partnered with Envestnet to make Envestnet’s 3(38) fiduciary services available to Vestwell advisers. Vestwell’s aim is to provide clients with a true turnkey solution.

Over time, the relationship will expand to include other Envestnet offerings, helping advisers become closer to their clients while being able to differentiate their services with customization.

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As the 3(38) investment manager, Envestnet will provide plan-level fiduciary services for Vestwell, which will handle recordkeeping and administration through its API [application programming interface]-driven platform. Together, they will aim to make it easier for advisers to effectively scale their business while being focused on participation and outcomes for participants.

“At Envestnet, we are dedicated to partnering with industry leaders like Vestwell to further the evolution of the art of recordkeeping for retirement plans, and to help advisers improve outcomes for plan participants,” says Khash Sarrafi, senior vice president at Envestnet Retirement Solutions. “Our fiduciary 3(38) capabilities, powered by Envestnet | PMC, combined with Vestwell’s transformative recordkeeping platform, will provide more advisers with the support they deserve to effectively and efficiently sell into, and service small and medium-sized businesses. This is the latest step forward in our ongoing commitment to expand the essential advice which helps clients achieve financial wellness—and lays the groundwork for scalable practice growth.”

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