Ascensus, OneDigital Expand PEP Offerings, Target Smaller Retirement Plans
Event summary
- Ascensus and OneDigital have launched two Pooled Employer Plans (PEPs): The Path Forward 401(k) and The Path Forward 403(b).
- This is Ascensus' first foray into 403(b) PEPs, expanding their product suite.
- The collaboration builds on an existing relationship managing over 1,000 retirement plans and $5 billion in assets.
- OneDigital will serve as the 3(38) investment fiduciary, while Ascensus provides recordkeeping and administrative services.
- Ascensus currently administers 45 partner PEPs with $2.7 billion in assets under administration.
The big picture
The launch of these PEPs reflects the ongoing trend of simplifying retirement plan administration for smaller employers, a segment often underserved by traditional defined contribution plans. Ascensus’ expansion into 403(b) PEPs indicates a strategic move to broaden its market reach and capitalize on the growing demand for pooled employer plan solutions. This partnership leverages OneDigital’s distribution network to accelerate adoption and compete with other PEP providers.
What we're watching
- Market Penetration
- The success of these PEPs hinges on Ascensus and OneDigital’s ability to effectively distribute them through OneDigital’s advisor network and capture market share from existing providers, particularly among smaller employers.
- Fiduciary Risk
- OneDigital’s role as 3(38) fiduciary introduces potential liability and reputational risk if investment performance underperforms or governance practices are questioned.
- Regulatory Scrutiny
- As PEPs become more prevalent, increased regulatory scrutiny of their structure and fiduciary responsibilities is likely, potentially impacting Ascensus and OneDigital’s operational practices.
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