Name: jeff kuzmich - Migrate_FA_Power_of_PEP_Financial_Advisors_04232025_4907850
Uploaded: 2026-02-26T05:54:02.871Z
Duration: 23 min 8 s
Description: jeff kuzmich - Migrate_FA_Power_of_PEP_Financial_Advisors_04232025_4907850

Transcript for "jeff kuzmich - Migrate_FA_Power_of_PEP_Financial_Advisors_04232025_4907850": And welcome everyone to our event today, The Power of PEP for Financial Advisors. My name is Daniella, and I will be moderating our event. To ensure you have a pleasant experience, we want to highlight a few items in the webinar console. First, please note that the primary audio connection for today's session is streaming via your computer and there is no dial in option. Be sure to check your speaker volume to ensure your computer audio is turned on and set to an audible level. To refresh your webinar browser session, on a PC, press the F5 key, or on a Mac, press Command R. Let's take a closer look at some other important features. To download and print a copy of today's deck for future reference and to access additional resources, refer to the Files and Resources window at the top right of your console, available at any time during the event. If you have questions during today's webinar, you can send them via the Ask Us a Question window. To submit a question, simply write in your question and click Submit. Please note that today's presentation does not constitute legal advice and is for informational purposes only. And now let's get to know our speaker, Scott Cavanaugh. Scott is a manager with our Paychex Regional Retirement Wholesale team. He began his career with Paychex Retirement Services in 2008 and has extensive knowledge of the retirement industry. His background includes roles in relationship management, sales, service, and various leadership positions. He holds his QKA credentials from ASPA along with his FINRA Series six and sixty three. Over his sixteen year career, Scott has helped financial advisors streamline their four zero one business and give participants access to these key benefits. What we'll review today, the growing retirement market, advantages of a pulled employer plan, how a PEP can be leveraged to expand opportunities, and the types of clients who best benefit from a pooled employer plan. And before I turn this over to Scott, we have a poll question. If you can just select the answer on your screen here. Do you currently have clients in a pooled employer plan? And I'm just gonna give everyone a few minutes. This will help Scott in the presentation today to understand your level of familiarity with our pooled employer plans. Okay, we've got a few more coming in. All right, Here are our results. Scott, take a look. I'm not sure if that's what you're seeing when you're talking to advisers, but this can help shape, what we're going to review today. So good stuff. And thank you, Daniella. And thank you everyone for taking the time today to join us for this webinar. I saw a lot of people there looking for more information on PEPs. So you're in the right place, like Danielle said on the agenda, we're going to go over a little bit of the market growth in retirement, some key features on a PEP and how that can help you really streamline your business, and we'll get right into it here. So let's talk a little bit about the 04/2001 ks market growth here. On the left hand side, you can see since 2018, so between 2018 and 2024, retirement plan adoption has increased roughly 6%. So that means about a third, only a third of all businesses are offering a retirement plan today or as of 2024. And on the right hand side, correlating with that is the increase in participation rates. So since 2020 to 2023, we've measured in the small plan space about a 6% increase as well in the marketplace. So more plan sponsors are adopting plans, more businesses and more participants are in the market actively saving for retirement. And why is this happening? So, you know, a couple of key features that we like to highlight, we call this the perfect storm of the plan growth. So let's start off in the labor market. So still today on this post COVID environment, we still see a strong need for employers to attract and retain their top talent. So, you know, not only do we see this in the four zero one ks plans that we administer, but also all the additional paychecks data that we have in our payroll and HR base. You know, this is what our small to mid sized businesses are saying, and they need these solutions to help attract and retain employees and a retirement plan helps with that. Secure Act two point zero, you know, really created the incentives to drive demand both from the employee and the employer side. So employers are able to get tax credits, both from, you know, the cost of the plan and the contributions of the plan and employees are able to leverage the, you know, those deferred tax savings, you know, whether doing pre tax or raw, so really leveraging Secure Act two point zero and what that brought about to plans. And then the state mandates. So, you know, about half of the states out there have something implemented or are looking to implement something, really a key driver in the small plan space. So not only is small business on the rise, we're also seeing a rise in the growth in our pooled employer plans. As you can see here, about 34,000 employers adopt a plan with us and about a billion in AUM. More of an updated number, we have actually north of 37,000 plans, a more current number, and about 1,500,000,000 depending on how the market's doing or what it wants to do there. So you can just see tremendous growth in popularity, you know, since these plans became available in 2021. And a allows a couple of key features here, you know, a PEP allows unrelated employers to really band together and join a four zero one ks plan. So similar to a multiple employer plans, you know, plans of the past there where MEPs typically required some type of commonality, typically like an association or a group or industry or trade. A PAP can have multiple employers under, or different employers under, you know, all different trades, so they can band together there and be a part of the same PEP, but also sponsor different plan features that they may want that's custom to their design. And the PEP also eliminates that one bad apple rule. So, you know, if you have multiple plans in there, obviously different industries, you don't have to worry about the other plan sponsored, you know, doing or what they're not doing. And we'll get into why a PEP takes that responsibility off of their table. So, as we talked about a little bit, the biggest benefits of the PEPs are that it removes the many obstacles, to four zero one ks adoption. It makes four zero one ks management easier, more affordable and more accessible to businesses of any size. It's that, PEP will provide to some of your clients here. A simplified turnkey solution, we make it very easy to set up, very easy to administer. Talked about those tax savings, both from employees and from the employer perspective, higher contribution rates than an IRA, so, you know, same as your typical four zero one ks, same four zero one ks limits that you've had in the past, just under the pooled employer umbrella. And employers are really able to offload the administrative duties. We'll get into that in a little bit here, but the pooled employer plan will take that on and take on a lot of those responsibilities that we'll talk about, which will lower the risk, as it offloads some of that fiduciary responsibility. It's still eligible for those tax credits, for those new plan adoptions in the Secure Act two point zero. So let's talk about some of those responsibilities that the client can look to offload here. So starting out one of the biggest advantages, the PEP is an administrator, what we call the pooled plan provider. And what the pool plan provider does is we manage the, the three thirty eight investment manager. So those duties include hiring and monitoring the three thirty eight, completing the plan audit. So if you have plans that are above the audit size, that may require that, the audit is included in that, in the pool plan provider. We file that 5,500, deliver the participant notices, handle all the loans, hardships and Quadro approvals, and also managing that participation in that enrollment education. So as you can see here, this is really a collaborative product where we, as the pool plant provider can come in and we can help monitor that three thirty eight, take on those three sixteen responsibilities, you know, act as that custodian directed trustee and give your clients a really, you know, turnkey easy solution by taking all of that, all those duties off of their plate. And like any four zero one ks plan, a PEP can also employ safe harbor provision, which waives the non discrimination testing in exchange for employer contributions, especially for small businesses. Non discrimination testing can be expensive. And if the plan doesn't pass a major administrative headache, a safe harbor PEP plan has all the same benefits as a regular PEP. So higher contribution limits than an IRA, it can be eligible for those secure act tax credits, including the employer matching contribution tax credit. One thing to point out here, safe harbor deadline is October 1, and since it takes a few weeks to get a four zero one ks plan up and running, you know, your client should look to start one in September at the very latest, but October 1 is the deadline for a new plan to establish a safe harbor plan. If you don't have a new plan and you have an existing four zero one ks plan, they can also join the pool plan, join the PEP and still have the same benefits, especially if those larger plans, if they're looking to maybe offload some of the, you know, audit responsibilities and the costs that may be a good solution for a client looking to join the PEP. And really the automation and integration with payroll really eliminates a lot of that administrative burden that a client would take on today. So, we talked a little bit about the growth opportunity. We talked about, you know, what a PEP is, how it's different than a MAP, some of the key features here. And then what I want to get into is some of the advisor opportunities, you know, how to really take advantage of this. So, you know, some of the services that you can provide with a PEP, you know, really that plan design consultation, that investment education, monitoring plan health and the plan success. So really focused on that participant planning and that participant outcome. So really working with those employees to, you know, save, save more, you know, and take advantage of these retirement savings tool. And then creating scale on the right hand side. So, you know, PEP really creates that streamlined client service and that experience there. So it allows you to leverage a streamlined model, which allows you to go on and focus on maybe more client acquisition or, you know, frees up your time to do other things, like focus on that participation, and increasing that for your plan sponsors. So, lot of good opportunity here for plan advisors to really come in and still bring value to your clients and to your participants and to that kind of plan design there. We talked about this a little bit before, so clients who would really benefit from the PEP, those competitive benefits, those that still need to attract and retain employees. We talked about the growth of the market and the perfect storm, right? This is still a very real topic where employers need to attract and retain. So, you know, if you're hearing pain points out there with your small business employers, a could be a great solution for them. Anyone risk adverse, so if they're looking to offload some of those responsibilities, right, you know your clients well, you know, which ones are want to get rid of that responsibility there, a PEP is a great solution for them. And then the complexity of a four zero one ks. So that perceived complexity, you know, sometimes, creates some inaction from a client, but a PEP really allows that to, you know, ease that administrative burden where we're taking on the notice responsibilities and things like that and communication to the participants. And then plans that may want to switch to an easier solution, simplified solution, a PEP can take on those mergers as well. The Paychex makes it easy, you know, for you as the advisor, you know, building and growing that book of business there. We like to be collaborative with you in the process, you know, as far as everything from, you know, quoting to presenting to the end user client there, we'll walk with you every step of the way and make sure the solution's dialed in before we go to the sponsor and handle any you know, questions thereafter, by giving you that plan expertise or the flexible plan design. So really that support for you and your clients. Yeah, we just try to make it as time efficient and effective for you all as possible. So with that, that is the high level of the path before, and I'll turn it back to Daniella for a couple of poll questions. Thanks, Scott. All right. Our final poll question for today, it should pop up here on your screen. Would you like to speak with a member of our regional wholesale team about partnering with Paychex to grow your book of business? All right, so we do have time for some questions. Just as a reminder, please submit those through the Ask Us a Question window. And if you do have a question that we're unable to respond directly to during our live discussion here, we'll ensure that one of our wholesalers gets back in touch with you to clarify everything. All right, let's dive right in. One of the questions I have here, Scott, is with the PEP, are advisors able to receive investment advisory fees? Yeah, Danielle, the answer to this question is absolutely. Use the advisors, still can put your investment advisory fee onto the plan. We can help customize that, you know, whatever you're looking for that service model with your clients. You know, short answer, yes, just let us know what it is and absolutely we can help you with that. Excellent. This question came in, do you see the PEP as a solution for small employers or employers over 100 employees? I really see it for both, you know, to be honest with you. So we see a huge adoption in the small plan space, you know, employers starting up plans, they want to make it easy, they want to make it turnkey, they want to eliminate as much, you know, kind of the day to day, you know, things to do as possible. So I'm really, we're really seeing a ton of adoption in that PEP space. You saw some of the stats there, you know, over 37,000 plans that we have adopted. And then, you know, we're seeing a lot of, you know, large plans to kind of, you know, explore the PEP option for, you know, the simplicity of the audit, and some of those things that they've been doing, those administrative tasks that they've been doing over the years, really looking to simplify their solutions. So we 've been looking at both solutions, but a ton of growth in the smaller startup space as well. Excellent. Another question here is, will advisor, excuse me, will there be a plan design flexibility for my clients if they choose a pet plan? Yeah, that's a great question. So, you know, some advisors or clients think, you know, hey, I'm going to get the same plan design as, you know, the other client that's in the employer plan. That's actually not true. So we have flexibility, you know, whether they want safe harbor or a non safe harbor, different maybe profit share options, know, you different like vesting requirements. So, we can really customize that solution to your plan sponsor on what they're looking for. So, we can absolutely give them a customized look and feel to their plan and to their business to help them attract and retain those key employees. Alright. What other questions do have? Danielle, any others in there? We do. What are the typical audit responsibilities and costs in a PEP for a large employer that currently has their own four zero one ks plan? I'm not going to speak to the cost of the existing one, just because I've seen it, you know, all over the board. That might be a good conversation for, you know, maybe one on one conversation with a wholesaler team, here at paychecks. We can kind of hop dive into that, but, you know, plans over a 100, absolutely. They have an audit. Typically it's an outside or it is an outside requirement, you know, not an in house CPA or someone like that. They have to go to an outside auditor and they come through the plan and they look at all the details and, you know, there is a cost to do that. So there is a lot of time savings, you know, you get the auditor out of your office, you get them coming out of the plan, out of your office. So there's a lot of wins in that court as well. We've gotten a couple of questions about three thirty eight as it relates to the PEP. Can you maybe just talk about that briefly again, Scott, and how, the roles and responsibilities, work within the pooled employer plan? Yeah, as the PEP provider here, so it's our responsibility to basically, monitor and maintain that three thirty eight relationship. So it's our responsibility to go out and find that. So we partner with a company called Mesero Financial they are the three thirty eight on our pooled employer plan at the moment. So that is, yeah, that's our three thirty eight option. Great. Okay. One about state mandates. Does a pooled employer plan satisfy state retirement mandated, Absolutely, mean absolutely. Yeah. The pool employer plan is a great solution for state mandates. You know, I didn't, cover this in too much detail on some of the slides, but, I'd say about half of the states right now have something enacted or proposed legislation out there. So state state mandates continue to come online. We actually have a great resource guide for the state mandates. So we can, you know, if you have businesses that are in or around maybe a state mandate area, or maybe you have employers that have a remote workforce, they may still be required to have, the state mandate in effect, but a PEP will absolutely solve that solution for them. Excellent. Will advisers have the same level of access to clients' plans within the adviser console? Yes. Yep. We'll put them on there, they'll be identified as the path there, you'll see them, but you will have access to same participation data, same participant data, you know, plan features and stuff like that, absolutely. Alright. I think a lot of the questions that are coming in, we have covered. I'm just gonna take one other quick look here. Okay. Well, I think that we have covered all our questions here today. If, for some reason we did not get to your question or you think of additional questions, please feel free to type them in now. Oh, this one came in. If we have 401Ks through paychecks, is it on the same portal? Yes. Yes. It's on the same portal. Yep. Great. Alright. Again, if you have additional questions, feel free to type those in, to that question and answer box and hit submit. Also, if you would like to talk with a member of our regional wholesale team, they are able to answer any questions you have. Please click the blue image card as shown here. As a quick reminder, a printable version of the slide deck is available in the Files and Resources window, and if you can spare a few moments after we conclude here, we'd welcome your response on a survey that will pop up as we close. Your feedback helps us develop future resources and have more of these advisor focused webinars. Thank you again for joining us today, and have a great day.