Pooled employer plans (PEPs) and participant personalization are at the top of recordkeepers’ strategic priorities, with most recordkeepers pointing to the micro and small market segments as key sources for new plan business. They are increasingly focused on enhancing the participant experience in order to develop new revenue opportunities and retain participant assets, according to The Cerulli Report—U.S. Retirement Markets 2025.

The PEP market continues to grow at a rapid pace, more than doubling assets from 2022 to 2023 to nearly $12 billion, with another $9 billion gain in 2024. The number of plans has also grown considerably, rising from 109 in 2021 to 339 in 2024. Active and retired participants with a balance increased 49% from 2023 to 2024, and more than 50,000 employers are now participating in a PEP.

According to the research, recordkeepers remain committed to this burgeoning market, with 71% of citing PEPs as a major or moderate strategic priority. Nearly two-thirds (63%) report that the growth of PEPs will have a positive impact on their recordkeeping business, and just less than one-third (32%) say they will have a significant positive impact.

“It’s no surprise that PEPs are top of mind for recordkeepers, as momentum and interest are building from plan sponsors,” says Chris Bailey, director. “Our research shows 20% of plan sponsors planning to conduct a recordkeeper review in the next 12 months are considering a PEP as part of their review process.”

Recordkeepers are also eyeing the small plan segment market for growth. More than half of recordkeepers believe the $1m to $5m and $5m to $25m plan segments will be a major source of growth over the next two years and are focusing their distribution efforts on the retirement aggregators and retirement specialist practices that work with sponsors in these two segments.

As recordkeepers expand into these market segments, they are increasingly focused on allocating more resources to participants. Cerulli’s research finds 88% of recordkeepers cite participant personalization as a major or moderate strategic priority. As part of this initiative, 82% of recordkeepers anticipate increasing allocations of resources to participant analytics, with cybersecurity, the implementation of artificial intelligence, and participant technology also expected to see increases (73%).

“In a competitive industry where fees continue to be under pressure, recordkeepers are focused on finding potential efficiencies, new revenue opportunities, and winning new business while meeting the needs of plan sponsors and participants,” says Bailey. “While the industry is making significant strides in providing participants with the help they need, recordkeepers should continue to remind plan sponsors and participants that these services are available to increase utilization and help improve outcomes,” he concludes.