Typically, when you think of a breach of fiduciary duty involving a retirement plan, you think of a plan sponsor acting in their own self-interest. They use their position with the plan for their own personal gain in some way. But it is much easier for a plan sponsor to commit a fiduciary breach than that; breaches can happen even when the plan sponsor has best of intentions.
Something as seemingly innocent as imprudent investments of plan assets can be determined to be a fiduciary breach. There does not need to be any kind of criminal or fraudulent intent; the actions are what matter in terms of fiduciary breaches.
You have to carry out your duties cautiously, provide proper notification of benefits to plan participants, follow the plan documents, and pay only reasonable expenses and fees. Those duties can be very open to interpretation and can lead to liability for the fiduciary if things go wrong with investments or required plan tasks are inadvertently forgotten about. Click here to learn more.
How can you as the fiduciary protect yourself from such a breach? Fiduciary liability insurance!
Where the ERISA fidelity bond is set in place to protect the participants of the plan it, however, does not protect YOU as the fiduciary.
Colonial Surety Company is a Treasury Listed surety company providing ERISA fidelity Bonds packaged with fiduciary Liability Insurance, with cyber liability insurance included at no extra cost. 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 a breach 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 a piece of mind that you are protected. Learn how to bundle your ERISA bond and fiduciary liability insurance for a discounted rate.
If you would like to learn more about purchasing an ERISA fidelity bond, or an ERISA fidelity bond package including fiduciary liability insurance, call 888-383-3313 or email ERISADept@colonialsurety.com. Learn more about becoming a Pension Professional Partner here.