Guest post by Jeff Dykstra, Senior Vice President, Rockefeller Global Family Office

With the introduction of the Secure Act and Secure Act 2.0, Pooled Employer Retirement Plans (PEPs) are now an important and growing solution to assist small to large businesses with offering 401(k) retirement plan benefits to their employees. By adopting a PEP, businesses can reduce risk, remove administrative burdens of sponsoring a retirement plan and provide access to a retirement plan backed by the expertise of an ERISA 3(16) Third Party Administrator and ERISA 3(38) Investment Manager. Through the introduction of Pooled Employer Retirement Plans, many businesses can leverage these benefits and in particular, Private Equity Firms have become a great example of a business that is well positioned to take advantage of the scale and differentiation a PEP can offer.

Unlocking the Benefits of Pooled Employer Plans for Private Equity Firms

In the dynamic world of private equity, mergers and acquisitions (M&A) are a common strategy for growth and expansion. However, these transactions often come with the complex task of consolidating multiple 401(k) plans from the acquired companies. This is where Pooled Employer Plans (PEPs) can offer significant advantages, particularly when leveraging the Rockefeller PEP.

Streamlining 401(k) Consolidation

One of the primary benefits of a Pooled Employer Retirement Plan is the ability to streamline the consolidation of 401(k) plans. By allowing unrelated businesses to participate in a single, unified plan managed by a Pooled Plan Provider (PPP), PEPs simplify the administrative burden and reduce the complexity associated with managing multiple retirement plans. This is especially beneficial for private equity firms that acquire companies with existing 401(k) plans, as it enables a seamless transition and integration into the Rockefeller PEP.

Cost Savings and Efficiency

PEPs offer cost savings through economies of scale. By pooling assets from multiple employers, the Rockefeller PEP can negotiate better plan rates and reduce overall costs. This not only saves money for the private equity firm but also for the acquired companies, making the transition more financially attractive. Additionally, the centralized management of the PEP reduces the time and resources required to administer the plans, allowing private equity firms to focus on their core business activities.

Enhanced Investment Management

The Rockefeller PEP includes the expertise of a ERISA 3(38) Investment Manager, who is responsible for selecting and monitoring the plan’s investments. This added layer of fiduciary protection relieves private equity firms of the risk and responsibility associated with investment decisions. The Investment Manager develops an Investment Policy Statement (IPS), selects and monitors plan investments, and executes investment changes, ensuring that the plan’s assets are managed effectively and in the best interest of the participants.

Comprehensive Support and Expertise

In addition to Rockefeller serving as the ERISA 3(38) Investment Manager fiduciary, the Rockefeller PEP offers the expertise of Empower as the plan recordkeeper and directed trustee, along with Finway Group, who serves as the PPP, which is the plan sponsor, plan administrator and named fiduciary of the PEP. Firms can leverage this expertise and feel confident that from onboarding support to ongoing relationship management, the Rockefeller PEP offers a high level of service to ensure a smooth and efficient transition. The plan also includes features such as personalized financial wellness programs, advanced experience for effortless employee enrollment, and a single point of contact for all plan- related inquiries.

Rockefeller: Your Trusted Partner in Retirement Planning

At Rockefeller, the Axiom Wealth Partners team has a focus on retirement plans and are dedicated to simplifying 401(k) responsibilities for clients. Our team of experts is committed to reducing fiduciary liability and providing comprehensive support throughout the entire process. By partnering with us, private equity firms can leverage our expertise to ensure a simplified transition and integration of 401(k) plans into the Rockefeller PEP.

Our team at Axiom Wealth Partners is well-equipped to handle the complexities of retirement planning, offering tailored solutions that meet the unique needs of each client. We provide ongoing advice and support, helping clients navigate market fluctuations and changes with ease. Our ultimate goal is to help you simplify the 401(k) experience for your existing companies and future expansion.

Conclusion

For private equity firms involved in mergers and acquisitions, the Rockefeller PEP presents a compelling solution for consolidating 401(k) plans. By streamlining administration, reducing costs, and providing expert investment management, the Rockefeller PEP helps private equity firms navigate the complexities of M&A transactions while ensuring that employees’ retirement benefits are well-managed and secure. Partnering with Rockefeller further enhances this process, providing dedicated support and expertise to simplify 401(k) responsibilities and reduce fiduciary liability.

For more information about our team and services, please visit: www.rockco.com/axiom-wealth-partners

About Calder Capital

Founded in 2013, Calder Capital, LLC is a lower middle market investment bank providing mergers and acquisitions advisory services to business owners, entrepreneurs, family offices, and investors across the United States. Calder’s services include mergers and acquisitions advisory, private funds and capital markets advisory, and business valuations. To learn more, please visit www.caldergr.com