After launching pooled retirement plans in the U.K. and Europe, Willis Towers Watson is hitting the U.S. market with a U.S.-style pooled offering.
In a news release Thursday, the British-American multinational company announced that it had launched LifeSight PEP, a pooled employer plan for the U.S. market that it says "simplifies 401(k) plan sponsorship for employers and improves outcomes for their employees."
The pooled employer plan will use Transamerica as its record keeper.
The company will pursue employers with anywhere from a few hundred employees to as many as 10,000 for the new pooled plan, said Michele Brennan, LifeSight U.S. business leader at Willis Towers Watson.
"Unlike many other PEPs in the market, we are not focused on small employers with fewer than 100 or so employees or start-up 401(k)plans," she said.
While the company anticipates early adopting employers to have between $50 million and $500 million in assets, it expects even large employers to adopt LifeSight "in the not-so-distant future" because the PEP offers a way to reduce costs for companies of all sizes, Ms. Brennan added.
The cost of the PEP will be based on the number of participants and the plan assets for each participating employer and could be up to 40% less than what employers pay today, she said.
Willis Towers Watson joins more than 100 firms that have launched or plan to launch PEPs in the U.S., according to the Department of Labor's registration database. Some of the high-profile providers of pooled employer plans include Principal Financial Group, Mesirow Financial Holdings, Paychex, Fidelity Investments, and Aon which reports having amassed more than $1 billion in assets and commitments in its pooled plan.
Pooled employer plans are a relatively new type of retirement plan that allows employers in unrelated businesses to band together to offer a single "pooled" plan. They are being touted as a way for employers to reduce their fiduciary and administrative duties and reduce plan costs through greater economies of scale. Pooled employer plans began rolling out in 2021, following the enactment of the SECURE Act, which facilitated the creation of the new plans.
