Government plans dubbed “Secure 2.0” are underway, strengthening 2020’s Secure Act to advance more retirement saving efforts. Recognizing that the COVID-19 crisis has underscored the critical importance of saving, policy makers are eager to ensure more workers have a path to a secure retirement.
Lawmakers estimate that last year’s Secure Act, will result in 600,000-700,000 new retirement accounts being formed. Now, work is underway on a follow-up bill, The Securing a Strong Retirement Act of 2021—aka Secure 2. 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.
According to 401k Specialist, some key aims of The Securing a Strong Retirement Act of 2021 are to:
- Promote savings earlier for retirement by enrolling employees automatically in their company’s 401k plan, when a new plan is created;
- Create a new financial incentive for small businesses to offer retirement plans;
- Direct the Internal Revenue Service to promote the Saver’s Credit to increase utilization;
- Allow individuals to save for retirement longer by increasing the required minimum distribution (RMD) age to 75;
- Offer individuals ages 62, 63 and 64 more flexibility to set aside savings as they approach retirement;
- Allow individuals to pay down a student loan instead of contributing to a 401k plan and still receive an employer match in their retirement plan;
- Make it easier for military spouses who change jobs frequently to save for retirement;
- Make it easier for employees to find lost retirement accounts by creating a national, online, database of lost accounts.
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. Colonial’s annual premiums cost less then what even an hour with an expert ERISA attorney will cost if a lawsuit or compliance issue lands in your in-box. Uniquely, Colonial’s comprehensive ERISA bond packages offer plan sponsors up to $1,000,000 of fiduciary liability insurance. 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.
With so much uncertainty and possibility in the air now, it’s especially important for plan sponsors to step up protection efforts. For example, small businesses are increasingly the targets of ERISA litigation cases. If you have not reviewed your plan fees in a while, do so now. Cybersecurity? New guidance has raised expectations related to the role of fiduciaries in protecting the plan from cyber threats.
As diligently as they work, plan fiduciaries are unlikely to ward off every risk—but they can secure protection. In fact, as a leading national provider of ERISA bonds, Colonial Surety is providing plan sponsors across the country with affordable protection packages. Here’s your three point plan:
- ERISA bonds are required by the Department of Labor (DOL) and protect the assets of the retirement plan from theft;
- Fiduciary Liabilitycoverage protects you and your assets from personal liability;
- Cyber Liability coveragecan safeguard your company and plan from covered losses and expenses in the event of a cyber breach.
With Colonial, you can easily secure this comprehensive coverage package today:
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, U.S. Treasury listed and in business all across the country.