Gender, race and ethnicity continue to play a big role in our chances for retirement success. The 20th annual retirement survey from Allspring Global Investments provides the latest intel on gaps, pointing to the critical importance of company sponsored retirement plans.
Minding The Gaps
Allspring’s survey of 2,758 “household financial decision-makers,” found that underserved segments of our population continue to face hurdles on the path to retirement. Summarizing the survey, the National Association of Plan Advisors reports:
The wealth gap still exists for most women, African Americans, and Hispanics, adding an extra hurdle for these individuals going into retirement. For instance, it found that:
- 69% of women retirees are confident their savings will last versus 87% of men; and
- African Americans were affected more by the pandemic financially and expect to retire two years later, across income levels.
“The financial services industry needs to do better in serving these groups, including building diverse teams of investment professionals to support all communities, offering tailored guidance throughout their working years, and helping individuals optimize retirement benefits,” the firm emphasizes.
Another important finding from the Allspring survey points to the importance of increasing support for those employees nearing retirement: “A key takeaway from our research is retirees are doing well but near-retirees are struggling and concerned,” observes Ron Cohen, Allspring’s Head of Defined Contribution Investment Only Distribution. “This is an enormous opportunity for advisors and plan sponsors.”
Benefit Participants, Protect Yourself
Retirement plan sponsors have the continuous fiduciary responsibility to ensure all participants are benefitting from the plan. For example, surveys have found that many participants are eager for increased guidance from qualified financial advisors, the latest educational resources, and, planning tools like online dashboards. Although most retirement plan sponsors outsource these plan services, monitoring remains an important duty. Remember, however: under the high standards of ERISA law, a plan sponsor retains fiduciary responsibilities and can be held personally responsible for mistakes in the administration of the plan. That’s why Colonial makes it easy, speedy and affordable for plan sponsors to obtain Fiduciary+Cyber Liability Insurance. Armed with this coverage, you can protect everything you’ve worked for with defense costs and penalty limits up to $1,000,000, if faced with claims of alleged or actual fiduciary breaches of duty in connection with the employee retirement plan. For retirement plan sponsors, a cyber breach can result in allegations of failed fiduciary oversight. That’s why at Colonial, Fiduciary and Cyber protection go hand in hand, giving you coverage against regulatory actions related to data and privacy.
Good To Know
The U.S. Department of Labor has an Advisory Council on Employee Welfare and Pension Benefit Plans (aka the ERISA Advisory Council). This group is charged with examining underlying challenges to retirement security and making recommendations accordingly. Plan Adviser reports that some of the action steps recommended to DOL leadership in the past year have included:
- address gaps in retirement security for women where lack of information, divorce and unpaid caregiving responsibilities negatively impact retirement savings;
- update existing regulations to provide safe harbors and encourage plan designs that would address this issue, that track and reflect the current dynamics of the workforce; and
- recognize the need for service providers to include diversity, equity and inclusion elements to provide underserved populations with relatable retirement professionals.
As you steer your company retirement plan forward for the benefit of all participants, make sure your ERISA Fidelity Bond, as required by the Department of Labor, is current and adequately covers the plan. Refresh your understanding of ERISA bonds via the Department of Labor’s handout, “Protect Your Employee Benefit Plan With and ERISA Fidelity Bond,” which you can find here. Note too: the Department of Labor requires ERISA Fidelity Bonds be obtained from the Department of the Treasury’s Listing of Approved Sureties (Department Circular 570), such as Colonial Surety Company. Retirement plan sponsors across the country ensure their continuous compliance by choosing our value-packed multi-year options: ERISA Bond Package.
Finally, remember that although required, ERISA bonds are not the same as having Fiduciary and Cyber Liability Insurance to protect yourself and your business. Conveniently, you can obtain all the coverage you need as a plan sponsor, quickly and affordably, right here now: Plan Sponsor Coverage Package.
Pension plan professional?
We’re here to help you with your plan sponsor clients—and we’ve got you too. From Errors and Omissions Insurance to Fiduciary Liability Insurance, Employment Practices Liabiity Insurance–and more, we’re HERE with the coverages pension professionals need to keep the business going—and growing. Insurance for Pension Professionals Right Here.
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. With a Trustscore of 4.8, we help safeguard plan sponsors, pension professionals and financial advisors — and keep their businesses compliant — with pain-free, efficient, and friendly service every time.