Retirement plan participants have the right to request plan documents and information. When they make a request, it’s important to respond in a timely manner—and to keep a record of doing so. Pay attention to how the request comes in—legal letterhead might signal a lawsuit, and extra attention to the response can prevent allegations.
Flex Your Fiduciary Muscles
Hopefully, your retirement plan has solid fiduciary processes in place—and experts advice not being shy about showing them off. How decisions about investment options are made, when the committee meets and what actions were subsequently executed, how service providers are selected and monitored—all these and more—require adherence to the fiduciary protocols of the retirement plan. Of course you also have to keep records of how you have followed the protocols. Doing so not just contributes to meeting the high standards of ERISA law, it may also help ward off a lawsuit.
For example, if you do receive a 104b request for plan documents, and it is on the letterhead of a law firm focused on representing ERISA plaintiffs, experts like Benjamin Grosz, partner at Ivins, Phillips & Barker, advise seeking counsel right away—and getting their help to share your fiduciary strengths:
If you get one of these requests and it’s written on the letterhead of a prominent ERISA plaintiffs’ firm, you know what is coming. Sometimes there are situations where these requests don’t get escalated to the right people, and that causes additional problems. If you get one of these requests, you absolutely want to go to your counsel for help, because there are specific responses and strategies to utilize. For example, if you have a great process and documentation in place, you may in fact want to overshare information on purpose. The plaintiffs’ litigators may decide not to pursue—and invest their time and money into—a less promising case where there is strong evidence of a good fiduciary process.
Outsourcing does not free plan sponsors from fiduciary obligations. As Archer Law reminds us, any person involved in the management of a retirement plan,“whether direct or indirect,” has fiduciary obligations. That means we can be held personally liable for breach of fiduciary duties. Even the allegation of a breach can be ruinous: if you suddenly needed an ERISA attorney to defend you against a claim, you would likely pay upwards of $600—per hour. Colonial Surety’s multi-year packages enable plan sponsors to secure Fiduciary Liability Insurance at locked in rates and annual premiums that cost less then one hour of ERISA legal advice. We even include Basic Cyber Liability Insurance. We make it so efficient and reasonable that you can secure insurance in minutes, now: Fiduciary with Cyber Liability Insurance.
Armed with Colonial’s Fiduciary-Cyber Pack, if you face claims of alleged or actual breaches of duty in connection with the employee retirement plan, you’ll be covered for defense costs and penalty limits up to $1,000,000. Plus, in the event of a cyber breach, your business—and plan—will receive support at every stage of incident investigation and breach response, as well as coverage against lawsuits or regulatory actions related to the breach. Obtain Protection Here.
ERISA law holds fiduciaries to high standards, which are actively enforced by the Department of Labor (DOL) Plan Sponsor reports “the DOL says, getting it right means understanding your plan and your responsibilities; carefully selecting and monitoring service providers; making contributions on time; providing appropriate disclosures to plan participants and filing annual reports to the government on time; and avoiding prohibited transactions.”
With so much to do, it’s common for pan sponsors to forget the basics—but doing so is risky. For example, experts caution that insufficient or expired ERISA bonds are a trigger for Department of Labor audits. In fact, failure to have current and adequate ERISA Bond coverage at all times is among the most common compliance issues plaguing retirement plan sponsors. Uniquely, Colonial Surety includes retroactive ERISA fidelity bond coverage for years when the plan was not adequately covered and provides cost-saving multi-year coverage, ensuring the ERISA bond remains Department of Labor compliant for the life of its term.
Our three point coverage package offers plan sponsors the greatest value, protection and efficiency. Conveniently, Colonial provides: the required ERISA bond to protect the assets of the retirement plan from theft; Fiduciary Liability coverage to protect you and your assets from personal liability; and, Cyber Liability coverage to safeguard your company and plan from covered losses and expenses in the event of a cyber breach.
Proceed with confidence: Three Point Coverage Package.
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.
Colonial Surety Company is rated “A Excellent” by A.M. Best Company, US Treasury listed and in business all across the country.