Voya Financial, one of the leading retirement plan providers in the U.S., will serve as the recordkeeper for the new plan, which will be available Jan. 1. The new PEP stems from the Setting Every Community Up for Retirement Enhancement (SECURE) Act provision allowing employers to join forces to create higher performing, more efficient 401(k) plans.
Aon's PEP will relieve employers of many fiduciary duties they have today. Due to the economies of scale, it also has the potential to lower fees for plan participants and provide access to state-of-the-art features that may be difficult for individual employers and fiduciary committees to both assess and access independently. The defined contribution plan provides the efficiency and scale of a pooled plan, while maintaining individual employer autonomy to define matching and other contribution levels, and various key plan design features. It also has the potential to provide cost savings to employers of all sizes.
The SECURE Act, which was federal legislation passed into law December 2019, was designed to encourage broader 401(k) plan participation and greater retirement savings. With the law's passing, employers will no longer need to sponsor their own individual 401(k) plan and absorb the risks and workload associated with that role. Instead, employers from all industries and sizes may pool resources together to increase efficiency and create better outcomes for participants.
The PEP will help enable better outcomes for participants at lower fee levels, reflecting the leveraged nature of investing across the whole pool of assets in the plan. Aon has also selected Voya Financial as the recordkeeper for the plan after a competitive bid process.
For more than 40 years, Voya has helped Americans plan, invest and protect their savings to get ready to retire better by serving the financial needs of approximately 13.8 million individual and institutional customers in the U.S.
"We are pleased to have Voya as a partner in this initiative to provide the very best in retirement services to PEP members starting in 2021," said Rick Jones, a senior partner at Aon. "We were greatly impressed by their commitment to plan participants and realized that there was no better institution to partner with given Voya's expertise and retirement insight."
"We believe PEPs will transform the retirement landscape, similar to how 401(k) plans transformed the pension landscape 40 years ago," said Paul Rangecroft, North America Retirement Practice Leader for Aon. "We are thrilled to enter this important market and are pleased to provide this plan as a service to employers as they look to increase efficiency, reduce risks and most importantly - create better retirement outcomes for participants."
"The signing of the SECURE Act brought numerous benefits that will help to support the financial well-being of individuals today," said Bill Harmon, president, Retirement Corporate Markets for Voya Financial. "At Voya, we are committed to bringing holistic financial wellness solutions forward so that a secure financial future is reachable for all Americans. We are excited that Aon has selected us to share this opportunity and look forward to working together as we support their 401(k) retirement plan services."
For more information about the Aon Pooled Employer Plan (PEP), click here or email retirement@aon.com.
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