ERISA lawsuits continue at the rapid cookie-cutter pace now possible because of established legal precedents. Industry experts report that as ERISA lawsuits become ever more commonplace, smaller plans are feeling the heat.
Disruptive and Expensive
Though it’s the billion-dollar lawsuits that catch public attention, the reality is that thousands of ERISA cases are making their way through court routinely. The dollar signs involved in most of these cases are not in the billions, but there’s nothing small about the disruption and expense incurred by the small businesses caught up in them. Consider the defense costs alone: securing an expert ERISA lawyer averages about $600—per hour!
Plan sponsors from small businesses will want to take note of the issues involved whenever ERISA lawsuits are settled. They hold important insights (aka scary reminders) about fiduciary expectations impacting plans of all sizes. For example, Plan Sponsor recently reported on a settlement involving a relatively small plan in which:
The plaintiffs claimed that, during the proposed class period of July 7, 2014, to the present, the fiduciary defendants failed to objectively and adequately review the plan’s investment portfolio with due care to ensure that each investment option was prudent, in terms of cost and performance. The complaint further alleged that the plan inappropriately maintained certain funds in the investment lineup presented to participants, despite the availability of identical or similar investment options with lower costs and/or better performance histories. Additionally, the plaintiffs claim the defendants failed to select the lowest-cost share class for many of the funds within the plan.
As you resolve to review your plan’s investment portfolio pronto (!), monitor all your service providers—and document your review processes, keep in mind that under ERISA law, all fiduciaries associated with a retirement plan can be held personally accountable to the plans’ participants and beneficiaries for a breach of fiduciary duties. Essentially, this puts your personal assets at risk, every day as you go about your duties. Even if you are not at fault or liable, you can still be sued—and defending yourself can be ruinous.
You don’t have to go it alone, though! Plan sponsors across the country are coming to Colonial Surety, for affordable and comprehensive protection packages which provide up to $1,000,000 of fiduciary liability insurance. Colonial’s fiduciary liability insurance covers your business—and you as the fiduciary—against claims of alleged or actual breaches of duty in connection with the employee retirement plan. Annual premiums total less then just an hour or two with an ERISA lawyer. Be proactive today: Choose Your Plan Sponsor Protection Package Here
While you are stepping up your protections, add cyber to the list. Budget constraints are resulting in many small business owners underestimating digital security risks— the frequently devastating. Having a response plan can make all the difference—and Colonial Surety can help. Our affordable Cyber Liability insurance provides a dedicated team of experts who assist at every stage of incident investigation and response in the event of a breach. Carefully vetted forensic and legal experts establish what’s been compromised, assess responsibility and notify impacted individuals. As needed, call center support, credit and identity monitoring is provided— even public relations experts. Liability protection in the event of covered lawsuits or regulatory actions due to a data breach? Of course, that’s included too.
Let Colonial Surety get you covered efficiently and affordably today. Opt for cost-saving multi-year coverage, ensuring the ERISA bond required by the Department of Labor remains in compliance. Summing up: the required ERISA bond protects the assets of the retirement plan from theft; Fiduciary Liability coverage protects you and your assets from personal liability; and, Cyber Liability coverage can safeguard your company and plan from covered losses and expenses in the event of a cyber breach. With Colonial, you can easily and quickly secure your affordable coverage package right now: Complete ERISA Bond Package.
Serving customers since 1930, Colonial Surety is the trusted source for the pension industry to secure legally required ERISA bonds, fiduciary liability insurance and cyber-liability insurance. We help safeguard plan sponsors, pension professionals and financial advisors – and keep their businesses compliant – with pain-free, efficient, and friendly service every time.
Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country.