Pop Quiz: Plan Fees? Investment Options?


Retirement plan fiduciaries are responsible for these answers—no matter how big or small the plan and the company are. In the event of legal and compliance challenges, big companies face big-dollar lawsuits (like Blackrock’s recent $9.7 million settlement), but the disruption and cost to smaller plans—and their fiduciaries— can spell disaster.


Violations of the Employee Retirement Income Security Act (ERISA) are costly—and disruptive too. For example, the lawsuit recently settled by BlackRock was filed in 2017—by a BlackRock employee and plan participant. Pensions & Investments reports:

The complaint alleged that BlackRock “selected and retained high-cost and poor-performing investment options, with excessive layers of hidden fees that are not included in the fund expense ratios” in the 401(k) plan and noted that “almost all” of the investment options in the plan were BlackRock funds.

BlackRock Institutional Trust Co., a division of BlackRock Inc., New York, agreed to settle a long-running class-action lawsuit alleging violations of the Employee Retirement Income Security Act in the firm’s employee 401(k) plan with a payout to participants of $9.7 million.

Whatever your thoughts about this particular case, now is a good time to remember: any individual involved in the management of a retirement plan can face personal exposure for breach of fiduciary duty. Imagine how even allegations of a fiduciary breach would divert attention and resources from your work—and life?  For example, if you suddenly needed an attorney with ERISA expertise, you would likely pay upwards of $500—per hour. Avoid this possibility—and a lot of other stress—with Colonial Surety Company’s affordable Fiduciary Liability insurance.

Remember: the required ERISA bond protects the assets of the retirement plan from theft; Fiduciary Liability coverage protects you and your assets from personal liability; and, Cyber Liability coverage can safeguard your company and plan from covered losses and expenses in the event of a cyber breach.

With Colonial, you can easily and affordably secure this complete coverage package.

ERISA Bond Package With Fiduciary Liability Coverage

Remember What The DOL Says…

As the latest big lawsuit related to retirement plan compliance with ERISA hits the news, it might be convenient to think that such litigation only happens to large plans and companies. The reality is that smaller cases are occurring all the time. In just one recent year for example, over 12,000 ERISA lawsuits were filed in U.S. District Courts. As the Department of Labor reminds us:

 The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. Fiduciaries must act prudently and must diversify the plan’s investments in order to minimize the risk of large losses…..

Fiduciaries who do not follow these principles of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of plan assets. Courts may take whatever action is appropriate against fiduciaries who breach their duties under ERISA including their removal.

Diligence choosing and monitoring fees, service providers and investment options are all important responsibilities of plan fiduciaries. It’s also important to be prepared—and protected—in the event of a lawsuit over breach of fiduciary duties.

Why go it alone? Available with a complete ERISA Bond Package, a whole year of Fiduciary Liability coverage is less than what you’d pay for one hour with that lawyer if a crisis hits. Plus, Colonial’s 2 and 3 year packages also include Cyber Liability coverage to protect your business and retirement plan in the event of a cyber breach.

ERISA Bond Package With Fiduciary Liability Coverage

Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country.