Gaps in retirement security persist based on gender, race and ethnicity. Accordingly, the Department of Labor’s Advisory Council on Employee Welfare and Pension Benefit Plans has made recommendations aimed at improving the retirement outcomes of women and people of color. Addressing plan leakage and encouraging employer matches are high on the list of considerations.
Generally referred to simply as the ERISA Advisory Council, the DOL’s Advisory Council on Employee Welfare and Pension Benefit Plans based its recommendations on an examination of underlying challenges to retirement security. As Plan Adviser reports:“The goal of the resulting recommendations is to find ways within the existing voluntary system to expand retirement plan coverage and participation…Novel recommendations from the council included that the DOL work with the Department of the Treasury and Internal Revenue Service to review penalties on involuntary small payments and hardship withdrawals, and to relieve the penalty tax for early distributions of small amounts.” Other recommendations the ERISA Advisory Council made to DOL leadership include:
- work to expand retirement plan access;
- increase interagency cooperation and coordination on retirement policy affecting underserved groups and expand its financial education;
- address gaps in retirement security for women where lack of information, divorce and unpaid caregiving responsibilities negatively impact retirement savings;
- update existing regulations to provide safe harbors and encourage plan designs that would address this issue, that track and reflect the current dynamics of the workforce; and
- recognize the need for service providers to include diversity, equity and inclusion elements to provide underserved populations with relatable retirement professionals.
Benefitting All Participants?
Plan sponsors have the continuous fiduciary responsibility to ensure all participants are benefitting from the plan. For example, surveys have found that many participants are eager for more guidance from qualified financial advisors, the latest educational resources, and, planning tools like online dashboards. With workers trying harder then ever to save, they are eager to fully leverage all the features of employer sponsored 401(k) plans. It’s a good practice for plan sponsors to periodically review the participation rates, deferral rates and personalized rates of return. Use this data to improve plan design and communication strategies. Increasing auto-enrollment deferral rates and adjusting the employer match are two examples of how plan design adjustments can increase employee well-being—and retention.
With long to do lists—and many regulations and responsibilities to attend to, plan sponsors appreciate the efficiency of Colonial Surety’s affordable, multi-year protection packages. Continuous coverage at locked in rates gives plan sponsors time and confidence to tackle all the other important work on their lists. You can select an affordable package in minutes today and receive a three point coverage solution:
- The ERISA bond required to protect the assets of the retirement plan from theft.
- Fiduciary Liability Insurance to protect you and your assets from personal liability.
- Cyber Liability Insurance to safeguard your company and plan from covered losses and expenses in the event of a cyber breach.
Important To Know
Failure to have an up to date ERISA bond is among the most common compliance issues caught by the IRS—and can even trigger an investigation by the Department of Labor. The ERISA fidelity bond protects the assets of the retirement plan from theft and can only be obtained from a surety listed by the US Department of Treasury. That’s why plan sponsors across the country trust leading national ERISA bond provider, Colonial Surety. Uniquely, Colonial includes retroactive ERISA fidelity bond coverage for years when the plan was not adequately covered. Additionally, plan sponsors can opt for cost-saving multi-year coverage, ensuring the ERISA bond remains Department of Labor compliant for the life of its term. Obtain ERISA Fidelity Bond Here Now.
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. With a Trustscore of 4.8, we help safeguard plan sponsors, pension professionals and financial advisors — and keep their businesses compliant — with pain-free, efficient, and friendly service every time.