Why are SBAM Member Companies Joining the SBAM Pooled Employer Plan (PEP)?

Small businesses across Michigan are discovering the advantages of joining the SBAM Pooled Employer Plan (PEP) for their retirement plan needs. Designed with business owners in mind, this solution provides a host of benefits that simplify retirement plan administration and enhance value for employers and employees alike.

1. Simplified Administration
Managing a retirement plan can be complex and time-consuming. The SBAM PEP streamlines many of the administrative tasks typically handled by the plan sponsor. These include processing distributions, enrolling participants, communicating with employees, tracking eligibility, and managing compliance testing and reporting. This simplified structure frees up valuable time and resources for business owners.

2. Reduced Fiduciary Liability
One of the most significant advantages of the PEP is the reduced fiduciary burden. The plan includes support from a 3(38) investment manager who assumes fiduciary responsibility for selecting and monitoring investment options. This helps protect business owners from the risks associated with making investment decisions on their own.

3. Flexible Plan Design
Although the PEP offers a streamlined solution, it doesn’t sacrifice customization. Employers can tailor the plan to meet their specific workforce needs, including eligibility requirements, vesting schedules, loan provisions, withdrawal options, and employer-matching contributions. This flexibility allows businesses to create a plan that aligns with their goals and culture.

4. Potential Cost Savings
By pooling resources with other businesses, SBAM member companies benefit from economies of scale. The PEP can offer group pricing, access to lower-cost investment options, and reduced fees for services such as compliance testing, plan document preparation, and Form 5500 filings. Additionally, eligible employers may take advantage of tax credits offered under the SECURE Act.

5. No Individual Plan Audit
For many small businesses, the requirement to conduct an annual audit of their retirement plan is a costly and burdensome process. With the SBAM PEP, participating employers are not required to conduct individual plan audits, eliminating this administrative headache and associated expenses.

6. SBAM Due Diligence and Monitoring
The SBAM PEP was built by business owners, for business owners. It’s not just a retirement plan—it’s a carefully curated solution with ongoing monitoring of service providers to ensure quality and performance. This due diligence provides added confidence and peace of mind for participating companies.

The SBAM Pooled Employer Plan offers small businesses a smarter way to provide retirement benefits. From reducing administrative responsibilities and fiduciary risk to saving money and enhancing plan flexibility, the SBAM PEP is a powerful tool to help attract and retain talent—while making life easier for business owners.

Interested in learning more? Visit sbam.org/retirement and request a proposal today!