PE/VC 401(k) Roll-Up, Simplified
TL;DR: Stand up one pooled 401(k) framework at the platform (PE/VC) level and plug every portco into it. Use either a PEP (one plan, one audit/5500) or an Exchange/GPS (many plans on shared rails). Both slash admin, standardize investments, and make Day-100 onboarding repeatable.
Pick your chassis
- PEP (Pooled Employer Plan): One plan; no common nexus required; the PPP acts as ERISA 3(16). You get one consolidated Form 5500 and one plan-level audit. Employers still monitor the PPP and fees.
- Exchange / GPS: Each portco keeps its own plan, but shares a named 3(16) admin, investment lineup, and plan year. It’s not a MEP; employers retain monitoring/fee oversight. 5500s (and large-plan audits) stay at the employer level—often at negotiated rates.
Why PE/VCs do this
- Admin offload: PASS can remove ~75% of time-consuming tasks. Exchange models with TAG take on 90%+ of admin duties.
- Cleaner ops: Providers handle day-to-day work and audit coordination at the master level (PEP) or through the framework (Exchange).
- Payroll pipes on day one: PayStart/API connectivity with ~150 payroll providers (100+ in some program literature) reduces errors and manual files.
Roll-in playbook (rinse & repeat)
- Decide PEP vs. Exchange (filing/audit preference, any nexus constraints).
- Flip on the rails: Appoint 3(16)/3(38), lock the lineup, connect payroll feeds, test contributions/loans.
- Migrate & launch: Standard notices, year-end data, 404/408 disclosures, and 5500 support live inside the framework. (Employers still monitor providers and fees.)
Which should a platform choose?
- Choose PEP if you want one plan, one audit, one 5500 and maximum centralization.
- Choose Exchange/GPS if you want heavy offload but each portco to keep its own filing/audit (often at negotiated audit pricing).
Bottom line
A platform-level PEP or Exchange gives you a single, repeatable 401(k) operating system across the portfolio: big-plan pricing, centralized governance, fewer distractions for CFO/HR, and faster post-close integration—without turning your team into plan admins. Just remember: even in pooled solutions, each employer must prudently select/monitor the 3(16)/PPP and review fees.
General information only; coordinate legal/tax counsel for your facts.