Voya Focusing on PEPs, MEPs With Advisers, Says Top Exec

Voya Financial Inc.’s pooled retirement plans now hold more than 17,000 employers and 1.8 million participants, combining for assets of nearly $90 billion, the firm unveiled Thursday.

The pooled plan provider attributed the growth to its “scale and reach” in the retirement plan industry and its focus on meeting the needs of all plan sizes, including the addition of more than 50 new pooled plan arrangement in the past 18 months. Much of that growth is coming from businesses starting their first retirement plans, according to the firm.

Voya’s Allison Dirksen, head of wealth solutions sales, told a conference of plan advisers on Thursday that the firm is looking to work with advisers to identify which clients would most benefit from pooled plans. She noted that, while PEPs in particular are still in early days, the firm has seen momentum throughout the years.

“I would say it’s still an immature marketplace, but we want to be in it to see where this is going to go,” she said at the LeafHouse National Retirement Symposium in Austin, Texas.

Dirksen said Voya is particularly focused on the potential for pooled plans to work for start-up retirement plans.

“We are leaning into startups,” she said, noting that Voya has seen a recent trend of startup sales going into an exchange or a group-of-plans arrangement. “We actually saw in the last two years double the increase of assets that are going into PEP or MEP programs.”

Voya’s announcement comes almost three years since pooled employer plans were made available via The Setting Every Community Up for Retirement Enhancement Act of 2019 to allow unrelated small businesses to experience the benefits of a larger workplace retirement plan. Multiple employer plans have been around for decades and are often used for businesses that are associated or related in some way.

In August, Voya started what it called the first 403(b) PEP in the country for nonprofit workplace plan providers. The SECURE 2.0 Act of 2022, passed at the end of 2022, added the 403(b) option to the PEP structure to allow its use for 501(c)(3) nonprofits and healthcare-related organizations.

Voya is not alone in reporting growth in the PEP option, in particular, which had garnered fanfare with the initial SECURE Act but hit roadblocks when the COVID-19 pandemic hit shortly after the legislation passed.

Paychex Inc. noted in August it had seen double-digit growth in its PEPs in the last 12 months and now included more than 25,000 employers, though the firm declined to provide assets within the plans. PEP provider Ascensus announced in September it had more than $1 billion in assets under administration in its 30 PEP offerings.

Though PEPs were initially designed in the SECURE Act as a low-cost play for plan sponsors, Dirksen said Voya has not found cost to be a significant focus. Instead, sponsors and advisers are looking at the advantages of administration and the potential behind offering the services typical of a larger plan. The cost element, she noted, has not been a leading factor.