Challenging Current Offerings


Facing market volatility and high interest rates, retirement plan sponsors are rethinking investment options for participants. According to industry experts, many plan sponsors are challenging current offerings in a quest for both diversification and protection in the current environment.


Re-evaluating The Options?

Navigating forward finds plan sponsors grappling with losses, pursuing more diversified options and working to limit liabilities. These are among the predictions retirement industry experts at Captrust are making for the go forward:


…Defined contribution (DC) plan sponsors are likely to reevaluate…the investment options and solutions their participants have access to. Many will look to reaffirm the appropriateness of their fixed income, target date, and capital preservation options. Others will consider whether it might be worth investing in assets that are more protective in a negative market environment, including in-plan annuities as retirement age continues to extend and retirees increasingly keep assets in the plan.  


Amid market volatility, both plan sponsors and their participants are seeing the value of diversification. But sponsors can only provide the tools for participants to diversify insomuch as they have access to diverse investment vehicles.… As a result, CAPTRUST experts predict that plan sponsors will feel an increased desire to challenge their current offerings to ensure participants have adequate options to diversify their investment portfolios. And plan sponsors will want more tools to help them diversify.


Experts also predict that as plan sponsors navigate into the future, ERISA litigation will continue to put decisions made about the plan under scrutiny. Accordingly, national risk management expert Richard Clarke observes that obtaining fiduciary liability coverage will be increasingly essential for plan sponsors:


In retirement planning, our new normal” has turned out to be never normal again,” thanks to a seemingly unending array of troublesome economic, global health, and political events that have dramatically disrupted retirement plans. The past few years have introduced new concerns for businesses, administrators, and sponsors in protecting both themselves and their employeesretirement plans. In a year that set all-time records for workplace class action lawsuit settlements, the top 10 ERISA settlements totaled $837 million last year, more than doubling 2020′s total of $380 million. And all indications point to a continued escalation of ERISA litigation….The commercial insurance product which defends and protects employee benefit plan decision makers charged with administering plans is fiduciary liability insurance.


While navigating investment options and choosing providers, even the most diligent retirement plan sponsor can never fully eliminate the risk of being held personally responsible, under ERISA law, for mistakes made in the administration of the retirement plan. Why take chances? The annual cost of Colonial’s Fiduciary and Cyber liability insurance is less than the fee for one hour of expert legal defense if a lawsuit or regulatory challenge strikes. Cover yourself and the business you built, in minutes, today:


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Financial Wellness: Worth The Investment?

Retirement industry leaders anticipate that another area of retirement plan sponsorship that will get increased attention in the year ahead is financial wellness programming, which is expected to become more personalized. As Captrust points out, investment in personalized financial wellness is likely to be well worth it:


According to data from HR Professional and Ernst & Young, companies with financial wellness programs in place saw increases in employee retention (56 percent), employee well-being (50 percent), and employee productivity (46 percent). Chris Whitlow, head of CAPTRUST’s financial wellness and advice group, says financial wellness programs show a clear return on investment. “Financial wellness programs benefit participants who need help navigating the complex world of investments, debt, spending, and saving,” he says. “But they also benefit plan sponsors by improving participation in retirement plans and, more generally, increasing engagement, satisfaction, and productivity at work. We see plan sponsors make thoughtful, future-focused lineups and choices for their participants, but those plans mean little if employees don’t know how to put them to the best use.”


Adding options and services that meet the needs of plan participants and generate engagement in the retirement plan are important considerations for plan sponsors. Just remember: you retain fiduciary responsibilities even when choosing and monitoring third party service providers. Protection is best practice for successful business owners. Obtain Colonial’s  affordable Fiduciary+Cyber coverage package in minutes and you’ll have defense costs and penalty limits up to $1,000,000, if faced with claims of alleged or actual fiduciary breaches of duty. Cyber Liability coverage is provided at no extra cost, so you will not only be defended against lawsuits, but also against regulatory actions related to data and privacy. Protect your business and yourself, today:


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Pension plan professional? Colonial can help you make sure your plan sponsor clients have the coverage they need—and we’ve got you too. From Errors and Omissions Insurance to Fiduciary Liability Insurance, Employment Practices Liabiity Insurance–and more, we’re HERE with the coverages pension professionals need to keep the business going—and growing.


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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. We help safeguard plan sponsors, pension professionals and financial advisors — and keep their businesses compliant — with pain-free, efficient, and friendly service every time.