Point of clarification: the pooled plan provider(P3) is NOT the plan sponsor. TITLE I of SECURE Act of 2019 explicitly states that each of the adopting employers are the PEP's plan sponsor. Also, the P3 is NOT "the" 402a fiduciary on a PEP. They are "a" 402 fiduciary that shares co-fiduciary duties with the plan sponsor/adopting employers. As "limited scope" plan sponsors (only responsible for their participant and assets) the adopting employer (AE) has ultimate responsibility for their participants.
Regarding, vacating a PEP: prior to joining a PEP, the AE should fully understand the PEP's exit strategy and exit fees. Each P3/PEP has its own exit strategy. Leaving any PEP is possible but understanding the process is important.
This is just one reason sponsors thinking of joining a PEP should work with an independent non-conflicted consulting group to ensure the AE chooses the best P3/PEP option for their participants. Also remember that each adopting employer is required by law to continually and consistently monitor the P3, PEP and service providers. With more than 500 PEPs now registered with the DOL it is more difficult than ever to make the right decision to join a PEP and to continue to prudently its viability.
Hope this is helpful.
Robb Smith, President
RS Fiduciary Solutions and PEP-HUB.com
Robb@PEP-HUB.com
402-210-7622
https://www.linkedin.com/in/robb-smith-963b2514/8
