Empower to Recordkeep $600M PEP

The Empower Annuity Insurance Co. of America will take over recordkeeping services for Associated General Contractors’ pooled employer plan, Empower announced on August 13.

The plan, AGC Select 401(k), includes approximately 150 member companies, 20,000 eligible participants and $600 million in assets under administration across 15 AGC chapters.

After 15 years as a traditional multiple employer plan, originated by the AGC’s Houston chapter in 2009, AGC Select 401(k) transitioned to a pooled employer plan in 2024.

NPPG Plan Professions, an independent pooled plan provider, will continue to provide fiduciary oversight of the plan along with Robert W. Baird & Co. Inc., which will continue to serve as the plan’s financial adviser.

“NPPG and the Steering Committee from AGC Houston and Louisiana AGC conducted a rigorous due diligence process to select Empower, ensuring the AGC Select 401(k) meets the highest standards for their AGC members,” said Steve Ellsworth, a director at Baird and a member of the AGC Select Steering Committee, in a statement.

Since 2021, Empower has collaborated with advisers and third-party administrators to establish and manage more than 50 PEPs, covering approximately 1,000 employer-sponsored plans and nearly 100,000 participants.

PEPs accumulated $9.41 billion in assets and surpassed 1 million participants as of December 2023, according to filings on the U.S. Department of Labor’s EFAST 5500 Database. Georgetown University’s Center for Retirement Initiatives estimated assets grew to more than $17 billion as of December 31, 2024.

On July 1, the DOL submitted to the White House’s Office of Management and Budget a request for information on pooled employer plans. The Employee Benefits Security Administration, part of the DOL, is soliciting comments in response to Section 344 of the SECURE 2.0 Act of 2022, which requires the department to study PEPs—including to ascertain the number of plans and covered participants, the fees, disclosures and enforcement actions taken against any—and then recommend to Congress, no later than 2027, how the plans can be improved through legislation.

The DOL also requested, on July 28, industry advice on how to make pooled employer plans more viable for small businesses. EBSA is accepting input for 60 days, seeking comment on:

• Structure and marketing of PEPs;
• Use of independent fiduciaries to mitigate conflicts;
• Development of a potential regulatory safe harbor to reduce legal exposure for small employers joining PEPs; and
• Whether further legislation or exemptions are needed to facilitate market growth.

As of June 30, Empower has 88,000 retirement plans under administration and $1.8 trillion in assets under administration.

“We’re excited to see more PEPs coming to market and turning to Empower as the partner of choice,” said Ken Munro, senior vice president of national sales at Empower, in a statement. “We look forward to taking them to the next level—where they can scale, grow and thrive for years to come.”