A Better Retirement Solution for Members:
The VMA Pooled Employer Plan

For many small and mid-sized businesses, offering a competitive retirement plan can be challenging. Administrative complexity, fiduciary responsibilities, and rising costs often place quality retirement benefits out of reach. Since 2016, the Virginia Maritime Association has helped solve that challenge by offering members access to a high-quality 401(k) retirement plan designed specifically to meet the needs of employers in Virginia's maritime and supply chain community.

Today, VMA's retirement offering is structured as a Pooled Employer Plan (PEP), a retirement plan model that has quickly become one of the most attractive options available to small businesses.

PEPs were established under the SECURE Act and launched in 2021, allowing unrelated employers to participate in a single retirement plan while sharing administrative services, investment oversight, and compliance responsibilities. Adoption accelerated rapidly. By the end of 2022, nearly 190 PEPs were operating nationwide, serving more than 618,000 participants and managing nearly $5 billion in retirement assets.

Key 2022 Developments and Impacts
SECURE 2022 Boost: Passed in December 2022, the legislation added flexibility to plan design and increased the number of employers eligible to participate, further accelerating adoption.

• Increased Tax Credits: SECURE 2.0 enhanced tax incentives for small businesses (1–50 employees) to start plans, offering up to 100% of employer contributions, up to per employee (years 1–2), alongside up to annually for startup costs.
• Fiduciary Relief: Over 80% of organizations viewed PEPs as a primary way to mitigate fiduciary risk, transferring administrative, investment, and compliance burdens to a Pooled Plan Provider (PPP).
• Market Concentration: By year-end 2022/early 2023, the market saw early concentration, with roughly 70% of all PEP assets held by the top 12 largest plans. 

Benefits of PEPs for Employers

• Lower Costs: Through economies of scale, smaller employers can access lower-fee, institutional-class investment options that would typically be unavailable on their own.
• Reduced Responsibility: PEPs remove most fiduciary responsibilities from the employer, allowing them to offload 3(16) administrative and 3(38) investment duties.
• Flexibility: While the plan is shared, employers can still tailor key contributions and design features to their specific business needs. 

The strength of VMA's retirement program was independently validated in early 2024 when Strategic Retirement Partners conducted a comprehensive review of the VMA Equitable Pooled Employer Plan. The analysis compared the plan's costs, services, investment lineup, recordkeeping, and administration against competing retirement plan providers.

The conclusion was clear: VMA's plan excelled in administration, costs, recordkeeping, investment management, and fees. According to the analysis, no competing 401(k) provider offered a superior overall package.

The value of the program is reflected in the experiences of participating employers.

"Century Express Virginia moved its 401(k) plan to the VMA in 2017. We made the switch because the VMA's plan offered better-performing funds with significantly lower annual fees than what we could secure as a small business. The VMA plan managers provide amazing support and oversee compliance, fund reviews, and recommendations. The peace of mind has allowed us to focus on our business while providing an exceptional benefit to our employees." -Ed O'Callaghan, President, Century Express Virginia

Pooled Employer Plans have emerged as one of the most effective ways for small businesses to reduce costs, simplify administration, and improve employee benefits.

For VMA members, that opportunity has been available for nearly a decade through a retirement solution built to support both employers and employees.

For more information about the VMA Pooled Employer Plan, contact:

James Blassingham, CLU®, AIF®, CPFA
Capital Financial Group
Email
757-461-2210

Sign in and learn more.