Aon Pooled Employer Savings is a type of retirement savings plan designed for employers who want to offer a competitive benefits package to their employees while minimizing administrative burdens and costs. This type of plan allows multiple employers to pool their resources and participate in a single, larger retirement plan, thereby achieving economies of scale and potentially reducing expenses for all participating employers.
Overview of Aon Pooled Employer Savings Plans
Aon Pooled Employer Savings plans are part of a broader category of retirement plans known as Pooled Employer Plans (PEPs). PEPs were made possible by the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, which aimed to increase access to retirement savings opportunities for American workers. By pooling resources, smaller employers can access higher-quality, lower-cost retirement plans that might otherwise be out of their reach due to the economies of scale achieved through collective participation.
Key Features of Aon Pooled Employer Savings
Some of the key features of Aon Pooled Employer Savings plans include reduced administrative burden for participating employers, as the plan administrator handles many of the day-to-day tasks associated with plan management. Additionally, these plans often offer investment options that are professionally managed, providing participants with a range of choices to suit their individual investment goals and risk tolerance. Furthermore, fiduciary oversight is a critical component, as the plan’s fiduciary ensures that the plan is operated in the best interests of the participants, helping to mitigate potential risks and liabilities for the employers.
Participating employers also benefit from cost savings, as the pooled nature of the plan allows for the spreading of fixed costs across a larger base of participants. This can result in lower costs per participant compared to a single-employer plan. The plans are designed to be flexible, accommodating the diverse needs of different employers and their employees, including varying contribution rates and investment options.
| Feature | Description |
|---|---|
| Plan Administration | Handled by the plan administrator, reducing the burden on participating employers. |
| Investment Options | Professionally managed, offering a range of choices for participants. |
| Fiduciary Oversight | Ensures the plan is operated in the best interests of the participants, mitigating risks and liabilities. |
Benefits for Employers and Employees
The benefits of Aon Pooled Employer Savings plans are multifaceted, impacting both employers and employees. For employers, the primary advantages include cost savings, reduced administrative burdens, and the ability to offer a competitive benefits package to attract and retain top talent. For employees, these plans provide access to professional investment management, diversified investment options, and the opportunity to save for retirement in a tax-advantaged manner.
Implementation and Participation
The process of implementing an Aon Pooled Employer Savings plan involves several steps, including plan design, where the specifics of the plan are tailored to meet the needs of the participating employers and their employees. This is followed by plan documentation, fiduciary oversight establishment, and participant education and communication. Employers considering participation should assess their current retirement plan offerings, if any, and evaluate how a pooled employer plan could enhance their benefits package and support their employees’ retirement savings goals.
Participation in Aon Pooled Employer Savings plans is generally open to employers of all sizes, although the specific eligibility criteria may vary depending on the plan's design and the participating employers. Employers should consult with retirement plan professionals to determine the best approach for their organization and to navigate the process of joining a pooled employer plan.
What are the main advantages of Aon Pooled Employer Savings plans for employers?
+The main advantages include cost savings, reduced administrative burdens, and the ability to offer a competitive benefits package to attract and retain top talent.
How do Aon Pooled Employer Savings plans benefit employees?
+These plans provide employees with access to professional investment management, diversified investment options, and the opportunity to save for retirement in a tax-advantaged manner.
In conclusion, Aon Pooled Employer Savings plans represent a significant innovation in retirement plan design, offering employers a powerful tool to support their employees’ retirement savings goals while managing costs and administrative complexities. As the retirement savings landscape continues to evolve, solutions like Aon Pooled Employer Savings are poised to play an increasingly important role in helping Americans prepare for retirement.
