With class action suits related to 401(k) plans rising sharply, now is a critical time to check that you are in compliance with ERISA regulations. Importantly, this includes ensuring an ERISA bond that properly covers your plan, based on the value of the total assets in it.
401(k) Plans Under Increasing Scrutiny
According to Bloomberg Law, there have been five times more class action suits related to 401(k) plan fees in 2020 than in all of 2019. Just last week, for example, a federal judge In Pennsylvania heard a proposed class action complaint from former employees of PNC Financial Services Group. As reported by Bloomberg Law:
PNC Financial Services Group Inc.’s retirement plan charges excessive administrative fees that the company fails to adequately monitor or rein in, two former employees told a federal judge in Pennsylvania in a proposed class action complaint.
The PNC plan, which holds $5.7 billion and covers more than 66,000 people, paid annual administrative fees of more than $85 per participant, when a reasonable fee would have been less than $35 per participant, the former employees said in a complaint….
Plan Sponsors Have Fiduciary Responsibility
As you may recall, the Department of Labor (“DOL”) regulations require an ERISA Fidelity Bond for your company’s retirement plan. A fidelity bond protects the assets in the plan from covered losses due to theft and misappropriation.
Keep in mind that your plan’s bond must be equal to or greater than 10% of the value of the total plan assets, with a minimum bond value of no lower than $1,000 and a maximum required bond value of $500,000.
Failing to ensure that your plan is bonded in the correct amount at all times could subject your company to DOL fines and penalties—and put your plan at risk of an audit. You could expose your company to allegations of breach of fiduciary duty and be held personally liable.
Secure Expert Help—and Comprehensive Coverage
Colonial Surety Company has a comprehensive way to help plan sponsors manage their responsibilities. As an ERISA Fidelity Bond expert, we can help you comply with the Department of Labor regulations and further protect your plan—and yourself in these extra challenging times.
Importantly, Colonial’s ERISA bond products ensure that your plan remains ERISA-compliant at all times. Colonial’s knowledgeable staff and user-friendly online services will support you through all aspects of obtaining and renewing your bond.
When you choose your package, you receive a discount on ERISA bond coverage for your plan; Fiduciary Liability coverage for yourself; and, the option to add on Cyber Liability coverage. Save time, money and stress: Get a Colonial Surety Coverage Package Now!