Commit To Portability



As the employment disruptions set in motion by the pandemic continue for businesses and their workers, it’s an important time for plan sponsors to facilitate the portability of retirement accounts between companies. Job path shifts make the journey to retirement especially twisty, but by facilitating retirement account portability, plan sponsors can make a big difference.

Promote Continuous Saving

In addition to all the other good reasons to help employees—past and present—save for retirement, doing so reduces financial stress at work. Employees who are less stressed do better at work—and of course that ripple demonstrably benefits the bottom line of our businesses. Experts at 401k Specialist suggest that plan sponsors can help participants continue on the path to retirement savings even as they shift jobs, by facilitating the portability of retirement accounts.


One important way plan sponsors can support portability is to stop the practice of “automatic cash-outs.” Experts advise that although it is a permissible and common practice to cash out accounts of less than $1,000 that are left behind by former participants, doing so is not constructive and clearly not in the best interest of participants. Contrary to belief, research shows participants do care about the money lingering in retirement accounts when they change jobs—they just need more help with options, like rolling the funds into a new retirement account. Studies show that“when given an easy way to do so, participants would prefer to keep these balances in the retirement system moving forward with them as they change jobs.”


Correspondingly, when hiring new employees, it’s important for plan sponsors to offer “assisted roll-ins.” Data indicates that most retirement plans are already set up to enable employees to roll in funds from other retirement accounts—and that employees want this opportunity. All that is missing is for plan sponsors to better communicate and promote the roll-in option. As 401k Specialist explains:


Besides representing a great benefit to participants, a resolution to offer roll-ins is easy for sponsors to implement.  According to the PSCA Annual Survey referenced earlier, 97.2% of defined contribution plans already allow roll-ins from other plans. With the vast majority of sponsors not having to make any changes to their plans in order to offer roll-in assistance, all they must do is to actively promote their plans as desirable destinations for consolidated retirement savings—calling attention to the investment options and other benefits that they and their record-keepers can provide participants.



Obtain Fiduciary Liability Coverage


Given the many—and expanding— responsibilities of being a plan sponsor, it’s important to be protected with fiduciary liability coverage. Even the allegation of a breach of your fiduciary duties can be costly for you and your business. There’s no need to go it alone. Colonial Surety’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 expert ERISA attorney if a lawsuit lands in your in-box. Colonial’s comprehensive ERISA bond packages offer plan sponsors up to $1,000,000 of fiduciary liability insurance. Choose Your Plan Sponsor Protection Package Here


Follow Up: Securing Your Future


Federal lawmakers are working on “Secure 2”—a follow-up to last year’s Secure Act. This effort incorporates a wide-variety of provisions aimed at expanding access to investing for retirement, while also increasing transparency about the performance of target-date funds. Efforts to ease the “administrative burdens” of both plan sponsors and participants are on the docket as well.


While new potential regulations wind their way through government, plan sponsors already have plenty to make sure they are up to speed on. For example, you are still required to have a current ERISA Bond to protect the assets of the retirement plan from theft. Don’t stop there, though: the ERISA bond required for the retirement plan does not cover you—the plan sponsor— as the fiduciary. Can you picture what even the allegation of a fiduciary breach would take from you?  Money, time, reputation: without protection, all are at-risk.


Why go it alone? Let’s get you covered, comprehensively and affordably—that’s what plan sponsors across the country rely on from Colonial Surety. Our 2 or 3-year packages provide the greatest overall savings and protection, including both fiduciary and cyber protection. Colonial even includes extended coverage to ensure your ERISA bond remains US Department of Labor compliant.


Colonial makes it so easy and reasonable to secure this coverage that you can do it now, right here: Complete Plan Sponsor Package Here.


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.


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.