Together, small businesses are the largest employer in the country—and they are increasingly prioritizing worker well being. For example, according to new research, one in four are responding to the disruption of the pandemic by adding or enhancing retirement accounts.
Strategic Priority
According to Lincoln Financial Group, small business owners with 10-100 employees are increasingly working to offer strong benefits packages as a strategy to attract and retain the talent needed for success. Summing up the results of a recent survey, experts observe that small business owners are looking for “innovative, simple solutions that meet their employees’ needs and make it easier for owners to focus on running their day-to-day business.” Specifically, as 401k Specialist reports:
Nearly all small business owners surveyed (93%) said they have re-evaluated their strategy and plan to make changes to their business due to COVID-19. More than a quarter (28%) of small business owners reported beefing up their benefits to attract and retain talent as a result of the pandemic: 27% are adding a retirement matching contribution, financial wellness program and/or retirement account. In addition, 30% are adding life insurance and more than 25% are adding benefits like accident, critical illness, hospital indemnity, vision and/or dental insurance.
Maximizing Interest: Retirement Plans
Experts encourage maximizing the appeal of retirement plans to workers by ensuring the plan responds to the current needs and interests of workers. Research has shown for example, that because employees are increasingly concerned about financial wellbeing, they are eager for more guidance from qualified financial advisors, the latest educational resources, and, effective online planning tools.
Retirement plan sponsors, whether new to the role or charging forward with enhancements, are advised to remember the continuous fiduciary responsibility of ensuring all participants are benefitting from the plan. As such, it is critical to revisit risk management plans periodically—ensuring all appropriate coverage is in place and current. Let Colonial Surety Company help. Just select an affordable, package and receive a three point coverage solution—in minutes:
- The ERISA bondrequired to protect the assets of the retirement plan from theft.
- Fiduciary Liabilitycoverage to protect you and your assets from personal liability.
- Cyber Liability coverageto safeguard your company and plan from covered losses and expenses in the event of a cyber breach.
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Common Ground
The timing is ripe for small business owners to develop new benefits strategies: workers want them too. Summing up key findings from a Harris Poll study, has conducted the National Association of Retirement Plan Advisors (NAPA) reports: “When asked about the importance of salary versus benefits, 51% of respondents agreed that salary is the most important deciding factor when weighing a new job opportunity, compared with 49% who agreed that benefits and financial wellbeing are the most important…64% … are looking for more out of their benefits than what their employer currently offers.”
With workers trying harder then ever to save, they are eager to leverage all the features of employer sponsored 401(k) plans. Experts advise plan sponsors to review the participation rates, deferral rates and personalized rates of return. Understanding these measures can inform efforts to improve plan design and communication strategies. Increasing auto-enrollment deferral rates and adjusting the employer match are two examples of how plan design adjustments can increase employee well-being—and retention.
As you carefully monitor the plans investment options, keep in mind that class action lawsuits on behalf of plan participants continue to put intense scrutiny on how the investment options offered participants are selected, benchmarked, and, if warranted, removed from the plan. Under the high standards of ERISA law, failure to act can result in allegations of a fiduciary breach. Plan sponsors can affordably mitigate their risks with affordable fiduciary liability insurance from Colonial Surety. Our annual premium is less than what you would pay for just one hour with an expert ERISA lawyer if disaster strikes—and we even include cyber liability insurance.
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Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country. Serving customers since 1930, we are the trusted source for the pension industry to secure legally required ERISA bonds, fiduciary liability insurance and cyber-liability insurance. With a Trustscore of 4.8, we help safeguard plan sponsors, pension professionals and financial advisors — and keep their businesses compliant — with pain-free, efficient, and friendly service every time.