House Passes New 401(k) Bill


The United States House of Representatives has passed a bill resulting in the most significant changes in years to 401(k) plans. With the Setting Every Community Up for Retirement Enhancement, or Secure, Act, it is now easier for employers to offer 401(k) type accounts and also for plan beneficiaries to convert their 401(k) balances into lifetime income.

With the population of those of the age of retirement in the United States growing and life expectancy rising, the government is attempting to help retirees have more money to live off of for longer so that they do not outlive their savings. The bill encourages 401(k) plans to offer annuities in order to ensure that people do not burn through their funds once they have retired. It also increases the age limit on when one can withdraw from the retirement account. Workers whose employers stop offering annuities will be able to transfer those agreements to an IRA and continue making contributions under this proposed law.

Employers without affiliation will be able to band together under this bill to offer a 401(k) type of plan, with the costs, time, and fiduciary risk of administering the plan now falling on a plan administrator overseeing the multiple employers’ plan.

How can you protect your 401(k) plan and plan beneficiaries?

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 breaches 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.

Colonial’s cyber insurance provides a services-based solution to help plan sponsors manage data breaches successfully. These services include a dedicated team of cyber breach professionals who assist plan sponsors at every stage of incident investigation and breach response. These professionals coordinate the carefully vetted forensics experts and specialized lawyers to help plan sponsors establish what’s been compromised; assess plan sponsor responsibility; and, notify those individuals affected. In addition, these services will also coordinate credit or identity monitoring, and PR advice to help the plan sponsor safeguard its reputation. Of course, Colonial’s cyber insurance also indemnifies and defends plan sponsors from covered lawsuits or regulatory actions, the risk of which may be reduced by a well-coordinated breach response, but can never be completely eliminated.

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.