Middle-market employers have long faced a disproportionate share of retirement plan complexity, spending management time and absorbing fiduciary risk that larger competitors can spread across dedicated internal teams.
Mike Ziccardi, Executive Vice President of CBIZ's Retirement & Investment Solutions Practice, has been speaking to Insurance Business America about the Pooled Employer Plan (PEP) landscape as his firm brings a new product to market.
"Managing a retirement plan has become increasingly complex," he said. "Employers are expected to navigate evolving regulations, oversee investments, manage vendors, and absorb fiduciary risk – all while controlling costs. A PEP lets multiple employers share one professionally managed 401(k) plan, greatly reducing administrative burden and fiduciary responsibility."
Launched last month, the CBIZ Retirement Advantage PEP consolidates what has historically been a patchwork of individual plan structures into a single, institutionally managed framework.
PEPs have been available since 2021, enabled by the SECURE Act of 2019, but middle-market uptake has been measured. Ziccardi says the pattern is familiar.
"Like many innovations across the employee benefits landscape, adoption tends to start in the large-market segment before working its way downstream," he said. "Many middle-market employers have preferred to take a wait-and-see approach, allowing early adopters to test the model before making a change themselves."
He also points to the economics of the decision. "Retirement plans are rarely among the largest budget items for most companies. Moving to a PEP does not usually change the desired employer contribution, which is typically the single largest plan expense, so the urgency to act has often been limited."
But that inertia is starting to shift.
"We are beginning to see the market thaw," Ziccardi said. "As PEPs establish a longer track record and employers become more comfortable with the structure, interest is increasing. The growth is likely to be gradual rather than sudden, but momentum is clearly building."
According to the US Department of Labor's 2025 Pooled Employer Plan Bulletin, PEP adoption has continued to accelerate since the SECURE Act's passage, with hundreds of plans now registered across the country.
The fiduciary conversation has changed and so have the risks
For many business owners, the most compelling aspect of a PEP is not potential cost savings, but the transfer of fiduciary responsibility. Ziccardi says the broader advisory conversation has shifted well beyond that single issue.
"The conversation has evolved well beyond investments," he said. "Historically, many employers viewed retirement plan advisors primarily through the lens of investment oversight. Today, fiduciary risk management, governance, cybersecurity, participant outcomes, fee reasonableness, and operational compliance are often taking center stage."
As litigation and regulatory scrutiny increase, Ziccardi says employers are becoming more selective.
"We're seeing a gradual shift away from investment generalists toward firms that can help navigate the increasingly complex fiduciary and regulatory environment surrounding workplace retirement plans."
When employers do move to a PEP structure, Ziccardi urges careful vetting of the pooled plan provider (PPP) – the named fiduciary responsible for selecting, monitoring, and replacing key service providers within the arrangement.
"A key red flag is when a PPP occupies multiple roles within the arrangement," he said. "For example, if the PPP is also serving as the advisor or recordkeeper, employers should carefully evaluate how potential conflicts of interest are being managed. After all, effective oversight requires independence, and employers should understand who is truly holding service providers accountable."
Retirement plan quality has become a key differentiator in talent acquisition, and Ziccardi says the way middle-market employers think about their 401(k) has fundamentally changed. For brokers who advise business clients on how pooled retirement structures are reshaping employee benefits strategies, the shift in employer mindset is significant.
"Leading middle-market employers no longer view their retirement plan in isolation," Ziccardi said. "Instead, it's becoming an integrated component of a broader benefits, financial wellness, and total rewards strategy. What's changed is that technology, automation, AI, and data integration capabilities have made personalization accessible to organizations of virtually any size."
"Consumers receive personalized recommendations everywhere else in their lives, whether through streaming platforms, online shopping, or social media," he said. "Increasingly, they expect their benefits experience to feel just as relevant and personalized. As a result, employers are focusing less on simply offering a plan and more on creating an experience that improves engagement, financial confidence, and retirement readiness."
While the PEP conversation is increasingly relevant, Ziccardi says advisors are often framing it wrong.
"Many advisors lead with cost savings, but that can oversimplify the value proposition," he said. "The idea of pooling employers together to create economies of scale has existed for years in the health and welfare space, so it's natural for cost to be part of the conversation. However, cost should not be the primary lens through which a PEP is evaluated."
The better questions, he argues, go deeper.
"The more important considerations are whether the PEP meaningfully reduces fiduciary burden, simplifies administration for HR and payroll teams, and ultimately, improves participant outcomes. Fee savings may certainly be part of the equation, but employers should also evaluate the quality of participant support, technology capabilities, financial wellness resources, and overall employee experience."
Ziccardi is also clear-eyed about the structural limits of the model. He doesn’t believe PEPs will become the default structure anytime soon, but he does think they will experience significant growth in certain segments of the market.
“For PEPs to become truly mainstream, employers will need greater awareness of the fiduciary and administrative benefits, continued proof of successful outcomes, and more confidence that they can achieve those benefits without sacrificing the flexibility that matters most to their organization,” he said.
CBIZ's integrated model of combining retirement consulting with employee benefits, insurance, payroll, and advisory services, is designed to address exactly that concern as the intersection of retirement, insurance and professional services is increasingly where the most meaningful workforce strategy conversations are happening.
