Doubts about whether Blackrock’s 401(k) followed the Plan’s Investment Policy Statement have led to the class action suit. Relatedly, here are three critical questions for retirement plan sponsors.
What Is the Investment Policy for Your Plan?
The first quarter is a good time for plan sponsors to review the Investment Policy Statement for their retirement plans. Take time to understand the Investment Policy Statement agreed to for your plan—and inquire about how your investment firm currently follows it. You can’t be an expert in everything—but, as a fiduciary, you do need to ask, ask, ask!
In the BlackRock 401(k) case, the class action alleges that: BlackRock entities favored their own proprietary funds when selecting investment options for BlackRock’s 401(k) Plan…. JD Supra reports that in the preliminary court proceedings:
The court held that summary judgment was precluded because a genuine dispute of a material fact existed as to whether BlackRock complied with the Plan’s Investment Policy Statement….…Trial is scheduled to begin on March 1, 2021.
What Does the U.S. Department of Labor Say?
Whether you are an experienced plan sponsor or newer to the role, now is also a good time to brush up on guidance and regulations from the Department of Labor (DOL). To get you started, here are some key points about your fiduciary duties from the DOL:
Fiduciaries have important responsibilities and are subject to standards of conduct because they act on behalf of participants in a retirement plan and their beneficiaries. These responsibilities include:
- Acting solely in the interest of plan participants and their beneficiaries and with the exclusive purpose of providing benefits to them;
- Carrying out their duties prudently;
- Following the plan documents (unless inconsistent with ERISA);
- Diversifying plan investments; and
- Paying only reasonable plan expenses.
Do You Have the Proper Coverage—For Your Plan and Yourself?
The DOL requires a current ERISA Bond for the plan—and it must be issued from a U.S. Treasury listed business, such as Colonial Surety Company. As a national leader in the field, Colonial can help you with the required ERISA Bond for the plan —and much more. We offer comprehensive coverage to help plan sponsors navigate the times at hand. Just select an affordable package and receive:
- The ERISA bond required to protect the assets of the retirement plan from theft;
- Cyber Liability coverage to safeguard your company and plan from covered losses and expenses in the event of a cyber breach; and,
- Fiduciary Liability coverage to protect you and your assets from personal liability.
Colonial makes it easy, fast, and direct to quote and purchase your coverage package online, from anywhere.
Important To Understand
As a plan sponsor, understand: the ERISA bond required for the retirement plan protects the participants of the plan, but does not cover you—the plan sponsor— as the fiduciary.
Uniquely, Colonial’s ERISA bond packages offer plan sponsors up to $1,000,000 of fiduciary liability insurance. Our 2 or 3-year ERISA bond packages provide the greatest overall savings and protection. In addition to fiduciary liability coverage, you can add cyber liability insurance to safeguard your company and plan from covered losses and expenses in the event of a cyber attack. Colonial even includes extended coverage to ensure your ERISA bond remains US Department of Labor compliant.
Colonial Surety Company is in business all across the USA. We are rated “A Excellent” by A.M. Best Company and U.S. Treasury listed.