Plan Fiduciary Breach Complaints Rise as Markets Fall


The biggest thing that plan fiduciaries can do to prevent claims of fiduciary breach is to implement and follow prudent fiduciary policies, procedures, and practices. This would theoretically cover issues involving costs, conflicts, and due diligence.

But if the markets fall and your prudently chosen investments are not performing as one would expect, plan participants and beneficiaries may accuse you of fiduciary breach. They will likely argue that if your investments were properly chosen, they would have performed better than they did while the market was falling.

But sometimes as a fiduciary there is nothing you can do! Sometimes investments just unexpectedly perform poorly and there was no realistic way to predict it.

Your process may have been airtight and your investments may have just not performed due to the market in general; in a normal market, these investments would have been prudent and performed as hoped. Click here to learn more.

But in a down market, previously prudent investments may not be prudent any longer. But how could you have foreseen a down market? It is impossible. There is only one way to protect yourself as a fiduciary from claims like these: Fiduciary Liability Insurance.

How can you as the fiduciary protect yourself from such a breach? Fiduciary liability insurance!

While the ERISA fidelity bond is required to protect the participants of the plan, it does not, however, protect YOU and your company as the fiduciary.

Colonial Surety Company is a Treasury Listed surety company providing ERISA fidelity bonds packaged with fiduciary liability insurance and cyber liability insurance. Colonial is one of the leading providers of ERISA related products, offering bonds approved by the Dept. of Labor. We make it easy to obtain your bond instantly as well as allowing you to purchase retroactive insurance for the years the plan was not previously covered.

Under ERISA, fiduciaries may be held personally liable for breach of their responsibilities in the administration or handling of employee benefit plans. Under ERISA 410, the plan cannot relieve you of this responsibility with indemnification language, however, it specifically permits persons with personal liability to purchase fiduciary liability insurance. Covering yourself with fiduciary liability insurance gives you peace of mind that you are protected. Learn how to bundle your ERISA bond and fiduciary liability insurance and cyber liability insurance for a discounted rate.

If you would like to learn more about purchasing an ERISA fidelity bond, or an ERISA fidelity bond package including fiduciary liability insurance or cyber liability insurance, call 888-383-3313 or email Learn more about becoming a Pension Professional Partner here.