Nearly half of small employers that do not sponsor a standalone retirement plan say they would consider joining a pooled employer plan (PEP), according to a new report from the Transamerica Institute. The May 2026 study, released as Transamerica marks 25 years in the pooled plan market, found that 48% of such employers express interest in the structure. That interest comes against a backdrop of widening state-level mandates that require many small businesses to either offer a qualified plan or enroll workers in a state-run auto-IRA.
The baseline need is significant. Data from the Bureau of Labor Statistics' September 2025 Employee Benefits Survey show that four in ten private-sector employees at firms with fewer than 100 workers lack access to any workplace retirement plan. For advisors serving this segment, the combination of employer interest and regulatory pressure is reshaping how retirement plan consulting is pitched.
What PEPs offer small employers
A PEP allows unrelated employers to share a single retirement plan administered by a pooled plan provider. The provider assumes most administrative and fiduciary duties—investment oversight, compliance testing, and Form 5500 filing—while the adopting employer retains only the responsibility to select and monitor the provider. For a small business owner without dedicated HR or finance staff, that transfer of fiduciary liability is the core value proposition.
The market has responded. According to the 2026 PLANSPONSOR Recordkeeping Survey, PEP assets totaled $34 billion at year-end 2025, with 10,797 adopting employers across 330 plans—a 44.8% increase in adopting employers in a single year. That is a sharp rise from roughly $2 billion when the PEP structure launched in 2021 under the SECURE Act.
State mandates accelerate the conversation
As of 2026, at least 17 states have enacted legislation requiring employers above a minimum size to either sponsor a qualified retirement plan or automatically enroll workers in a state-run auto-IRA. For advisors with small business clients in those states, PEPs offer a private-market alternative that includes employer matching, plan design flexibility, and higher contribution limits—features that state IRA programs do not provide.
The compliance deadline changes the nature of the conversation. An employer who might otherwise defer the retirement plan decision now faces an external trigger. An advisor who raises the issue proactively, with a specific solution, is positioned differently than one who waits to be asked. As conversion gaps between DC plans and wealth management persist, this proactive approach could help advisors capture new relationships.
Growth data carries a caveat
The PEP growth trajectory is not without nuance. A June 2026 analysis by Georgetown University's Center for Retirement Initiatives, produced with Gallagher Fiduciary Advisors, found that the majority of PEP assets reflect migrations from existing single-employer plans rather than coverage extended to previously unserved employers. The PEP participation rate recorded in Department of Labor data stood at 36.2%, against a Vanguard plan-weighted average of 82% for traditional plans.
Kelsey Mayo, chief of retirement policy and regulatory affairs at the American Retirement Association, noted at a Georgetown webinar in August 2026 that small employer PEP adoption had not been as robust as originally intended. She said further policy reforms and industry coordination would be needed to reach the employers the SECURE Act was designed to serve.
That context matters. The PEP structure is sound and the demand is real, but conversion from interest to adoption—especially among the smallest employers—still requires active outreach, education, and enrollment support. Advisors who can provide that support may find a receptive audience, particularly as state mandates push more small businesses to act. For those already advising business owners, the intersection of retirement planning and cash-flow planning for exits is becoming increasingly relevant.
