SEP, MEP, and soon PEP! – Company 401(k) Plan Options

January 2021 will be here before we know it, and coming the first of the year, company 401(k) plan options will offer another solution, a PEP (pooled employer plan).

We understand there are a lot of choices and jargon in the 401(k) planning world such as fiduciary, 3(38) Investment Manager, and MEP to name a few. We are excited to help you consider the best option to offer your employees a robust 401(k) plan.

Schedule a call or video conference today, as we are happy to help decipher the best 401(k) plan for your business.

What are your options?

SEP – Single-Employer Plan
An employer is the 401(k) plan sponsor for a SEP. This role carries the fiduciary responsibility to offer a DOL (Department of Labor) compliant plan, and portions of this responsibility can be offloaded to service provider partners. For instance, Shelton 401(k) acts as an ERISA 3(38) Investment Manager responsible as the investment fiduciary on behalf of the plan sponsor. We have an investment committee responsible for all fund selections and monitoring and carry fiduciary liability insurance for our clients.

MEP – Multiple Employer Plan
A Professional Employer Organization (PEO) or an association group with affiliated members are the 401(k) plan sponsor for a MEP. In this scenario, a PEO or association carries the fiduciary responsibility, and can choose to offload portions to service provider partners such as Shelton 401(k). Thus, the risk and responsibility transfers from an employer to a PEO or an association group. MEPs can save employers money because of efficiencies of scale.

By the way, Shelton 401(k) is an Associate Member of NAPEO. Learn more about PEO services.

PEP – Pooled Employer Plan – COMING SOON!!
A PEP is an option that will be available on January 1, 2021. As if we all needed any more reasons to look forward to the year 2021, this is a biggie for company 401(k) plans. A PEP will allow unaffiliated businesses to come together in one 401(k) plan which will save in workload and cost. The eligibility to be a Plan Sponsor will expand beyond the PEOs and association groups and will include financial service firms such as Shelton Capital Management. The PEP structure will not only help employers who do not have a plan set up yet but also employers that have a plan that wish to transfer plan sponsor responsibilities and potentially save money all at the same time.

Shelton 401(k) has the reputation of providing extensive support to plan sponsors as an investment fiduciary and to plan participants through investment education and live client service. Allow us to help promote retirement readiness at your company.

Here’s to your success!