Plan sponsors can anticipate lots of action on new regulations to spur employee retirement savings in 2021. Across the country, there is unity around this priority.
Widespread Agreement: Encourage Employee Saving
Although not quite making the nightly news headlines yet, the importance of supporting employees in their efforts to save for retirement is high on the agenda of many lawmakers for 2021.
As the Society for Human Resource Management reports:
The House Ways and Means Committee recently introduced the bipartisan Securing a Strong Retirement Act (H.R. 8696), dubbed “Secure Act 2,” which builds on the Setting Every Community Up for Retirement Enhancement (SECURE) Act that was signed into law last December to improve retirement savings opportunities for U.S. workers.
The Secure Act 2 has ambitious goals, with key legislators aspiring to: help Americans approach old age with the confidence and dignity they deserve after decades of hard work and sacrifice.
Increasing attention on employer-sponsored retirement plans means that plan sponsors need to be vigilant about following all government regulations. Start by taking action to comply with fundamentals—like having an ERISA bond for your retirement plan. Remember, only companies named on the Department of Treasury’s listing of approved sureties are able to provide ERISA fidelity bonds.
Colonial Surety Company is not only U.S. Treasury listed, but also rated “A Excellent” by A.M. Best Company, and, licensed in all 50 states, the District of Columbia and most U.S. Territories. At Colonial, we understand how busy plan sponsors are. That’s why we offer a simple digital and direct process: purchase your ERISA bonds, with additional, insurance coverage, instantly, affordably, and online.
Colonial offers unique ERISA bond packages. Obtain the required ERISA bond for the company sponsored 401(k) plan—plus, affordable additional protection, such as Cyber Liability coverage for the plan, and Fiduciary Liability coverage to protect plan sponsors.
Increased Emphasis on Automatic Enrollment
One key aspect of the new legislation is the focus on automatic enrollment to help a greater diversity of employees jumpstart and incrementally increase their retirement savings. Data on associated practices has been promising. As reported by The House Committee on Ways and Means:
One of the main reasons many Americans reach retirement age with little or no savings is that too few workers are offered an opportunity to save for retirement through their employers. However, even for those employees who are offered a retirement plan at work, many do not participate. But automatic enrollment in 401(k) plans – providing for people to participate in the plan unless they take the initiative to opt out – significantly increases participation. Since first defined and approved by Treasury in 1998, automatic enrollment has boosted participation by eligible employees generally, and particularly for Black, Latinx, and lower-wage employees
Additional action areas: included in new legislative efforts are:
- Expediting Part-Time Worker’s Participation
- Providing “catch-up contribution” provisions for employees 60 and older
- Offering credit for small employer pension plan start-up costs
- Simplifying “savers credits”
Gear Up for 2021
Plan sponsors are encouraged to get a jump start on what is sure to be a busy new year. Obtain the proper, current ERISA bond coverage required for your retirement plan. Colonial Surety Company, a leading provider of ERISA fidelity bonds, even includes retroactive bond coverage for past years if the plan was not adequately covered.
Colonial’s unique ERISA bond packages offer the best value, providing up to $1,000,000 of fiduciary liability insurance coverage and giving you the greatest protection and overall cost savings. Our 2 or 3-year packages also include cyber liability insurance to safeguard your company and plan against a loss due to cyber attack — plus extended coverage to ensure your bond remains U.S. Department of Labor compliant.
ERA bond packages offer the offer up to $1,000,000 of liability in