Morningstar Investment Management and PAi Announce First ESG Pooled Employer Plan

October 14, 2021

CHICAGO, Oct. 14, 2021 /PRNewswire/ -- Morningstar Investment Management LLC, a subsidiary of Morningstar, Inc. (Nasdaq: MORN), and Plan Administrators, Inc. (PAi), a retirement plan administrator and recordkeeper, today announced plans to offer the industry's first Pooled Employer Plan (PEP) intentionally designed to limit exposure to material environmental, social, and governance (ESG) risks. The Morningstar ESG Pooled Employer Plan is expected to launch in early 2022, pending final guidance from the U.S. Department of Labor on the use of ESG factors to select investments for retirement plans.

PEPs allow employers of any size or industry to band together to participate in a single retirement plan. This helps relieve administrative and compliance burdens and potentially reduces fees, making it easier for small- to mid-sized companies to offer a 401(k) plan so their employees can save for retirement. The PEP from Morningstar Investment Management and PAi will feature funds that meet Morningstar Investment Management's rigorous investment selection criteria and pursue investment strategies designed to limit ESG risk. Morningstar Investment Management's investment team uses both the Morningstar Sustainability Rating™ and interviews with fund managers to ascertain the ESG risk of investments under consideration. The objective of the Morningstar ESG PEP will be to create as close to a complete ESG lineup as possible, though certain asset classes (such as TIPs or money market funds) where no ESG investment option exists in the market may be represented to help participants diversify their portfolios.

"Sustainability is the new face of long-term investing, and we believe every company should be considering ESG risk when designing a retirement plan for their employees," said Brock Johnson, president of Global Retirement and Workplace Solutions at Morningstar Investment Management. "The Morningstar ESG Pooled Employer Plan is designed to empower forward-thinking companies with an opportunity—perhaps for the first time—to offer their workers a retirement plan truly built for the modern era."

PAi Trust Co. will oversee the plan as the pooled plan provider, and the PEP will be offered on PAi's CoPilot recordkeeping platform that focuses on outcomes by engaging participants using event-based alert messages. In addition to those timely alerts and nudges, CoPilot provides a Years of Retirement tool that shows participants how many years their savings will last, not just how many dollars they've saved.

Amy Hermann, director of sales and marketing at PAi explained, "PAi believes every employee should have access to an employer-sponsored retirement plan. Adding PEPs to their retirement plan options makes it that much easier. Plus, a PEP takes the day-to-day administration off employers' plates so they can concentrate on running their business. By teaming up with Morningstar Investment Management on the Morningstar ESG PEP, PAi can fulfill a growing need in the market for ESG and we believe that Morningstar Investment Management is well-positioned to help us create that service."

Morningstar Investment Management will select and manage the investment lineup for the Morningstar ESG PEP, using its expertise from building and overseeing 20,4151 lineups for its fiduciary services program and drawing from Morningstar's independent research and ratings. Morningstar Investment Management will also create a custom ESG target-date portfolio for the PEP, designed as an option for the Qualified Default Investment Alternative.

More information about the Morningstar ESG PEP is available here.

About Morningstar, Inc.  
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The Company offers an extensive line of products and services for individual investors, financial advisors, asset managers and owners, retirement plan providers and sponsors, and institutional investors in the debt and private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, debt securities, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with approximately $251 billion in assets under advisement and management as of June 30, 2021. The Company has operations in 29 countries. For more information, visit Follow Morningstar on Twitter @MorningstarInc.  

About Morningstar Investment Management LLC's Workplace Solutions group  
Our parent company, Morningstar, Inc., was founded on the simple idea that when people have good investment information, they can make better choices that help them achieve their financial goals. In the retirement solutions group at Morningstar Investment Management LLC, a subsidiary of Morningstar, Inc. and a registered investment adviser, our advocacy for the individual investor extends to the workplace retirement market where the responsibility for investing and saving now rests with employees. Our products and services—which range from a managed accounts service to target-date products to custom models and fiduciary services—are not only designed to help people save for the retirement they want, but to help them make their money last once they get there. 

About PAi 
Since 1983, PAi has helped people successfully save for retirement by changing retirement outcomes with participant-focused, easy-to-manage 401(k) retirement services. CoPilot's recordkeeping services feature Years of Retirement calculations, allowing savers to see exactly how many years their savings can buy, and an event-based alert system that keeps participants on track by sending updates along the way. See how CoPilot is changing the retirement conversation:

Investment research is produced and issued by subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC, registered with and governed by the U.S. Securities and Exchange Commission. Ratings are statements of opinions, subject to change, are not to be considered as guarantees, and should not be used as the sole basis for investment decisions.  

©2021 Morningstar, Inc. All Rights Reserved. 


1 Data as of June 30, 2021. Includes plans that are using Morningstar Investment Management's 3(38) and 3(21) services

Morningstar Media Contact: 
Stephanie Lerdall, +1 312-696-6037,  

PAi Media Contact:
Skyla Loritz, +1 800-236-7400 ext. 3493,  


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