If you are a plan sponsor, responsible—that’s you. In fact, ERISA law obligates you to be more careful with the retirement assets of your employees than you are with your own money. Irresponsibility—whether or not intentional, has painful consequences—even for small businesses and their plans.
Too Small To Matter?
Just because it tends to be the big ERISA cases that make headlines, it doesn’t mean that small businesses are not held to the same standards and consequences. For example, recently the Department of Labor’s Employment Benefit’s Security Administration (EBSA) completed an investigation of the retirement plan of a business in Illinois. The conclusion? A US District Court ruled that from 2017-2019, the owner failed to forward $10,184 in employee retirement contributions to the company’s retirement plan. Restitution was made: the owner paying $14,536 to the plan, including both the unremitted employee contributions and $4,352 in lost earnings.
Additionally, the business owner paid a penalty, was barred from future service as a fiduciary, was required to terminate the plan—and pay remaining assets to participants. The company is now out of business. EBSA provided this important reminder to all plan sponsors:“Employers who fail to fulfill their responsibilities as fiduciaries of their workers’ retirement savings plans compromise the fund’s growth potential and cost workers returns on their investment,” said Employee Benefits Security Administration Regional Director Jeffrey Monhart in Chicago. “The U.S. Department of Labor’s Employee Benefits Security Administration is committed to ensuring the integrity of employee benefit programs and holding those who violate the law accountable.”
ERISA obligations are among the highest known to law. As fiduciaries, plan sponsors cannot afford to be irresponsible or make excuses. If you face an allegation of a fiduciary breach, ERISA law won’t care why you erred. The reality is, no matter how diligent you are in your duties, you could face allegations of a fiduciary breach. Even defense against allegations of a fiduciary lapse are costly and disruptive, with ERISA lawyers costing over $600 per hour. That’s why it is important to obtain fiduciary liability insurance from Colonial Surety Company. It covers the business—and the plan sponsor—against claims of alleged or actual breaches of duty in connection with the employee retirement plan. Colonial even includes cyber liability insurance along with fiduciary liability insurance—and the annual premium for this comprehensive protection is less than just an hour or two with an ERISA lawyer. Get protected now: Choose Your Plan Sponsor Coverage Here.
Cyber Breach Response Plan?
Retirement plans across the country are finding out that the Department of Labor is already working to enforce the cybersecurity guidance that was just issued earlier this year. Be sure to study up on the U.S. Department of Labor (DOL) guidelines for mitigating the risks of cyber threats to retirement accounts. Remember, a cyber breach is not always a disaster but mishandling it is. In fact, cyber breaches can lead to allegations of fiduciary breaches too. That’s why Colonial Surety’s multi-year protection packages for plan sponsors conveniently come with Cyber Liabiity Insurance. Get covered today and in the event of a cyber breach at your business, experts will identify what’s been comprised and coordinate the response. Liability protection in the event of covered lawsuits or regulatory actions due to a data breach? That’s included too.
Colonial’s multi-year packages provide the greatest convenience and value, ensuring continuous compliance and protection. Packages include:
- The required ERISA bond which protects the assets of the retirement plan from theft;
- Fiduciary Liability coverage to protect you and your assets from personal liability; and,
- Cyber Liability coverage to safeguard your company and plan from covered losses and expenses in the event of a cyber breach.
Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country. Serving customers since 1930, we are 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.