Spending trends are way up! Pension industry experts advise retirement plan sponsors to ensure participants are receiving a steady flow of information about saving and retirement planning. Thriving retirement plans focus on high levels of participant engagement.
Don’t Revenge Spend Everything Away
That’s an important message for everyone, according to 401K Specialist: Spending is up, and personal savings rates are plunging….Not only is spending up, but revenge spending is up. What is revenge spending? It’s that vacation people didn’t take or the wedding they didn’t hold. It’s the boat they never bought or the addition they never put on their house. In this case it’s what was put on hold in 2020.
Experts advise making sure these key points are reaching plan participants now:
- Plan for the long term. It’s a good time, for example, to re-assess goals and expenses. It’s also a good time to dig into estate planning.
- Take advantage of low-interest rates. Consider, for example shortening the length of a mortgage.
- Review 401k contributions. What impact could increasing your contribution, even modestly Employees nearing retirement will appreciate additional attention.
- Payback COVID hardship withdrawals from the retirement plan. Avoid adverse tax consequences by repaying within three years.
When communicating with plan participants, don’t forget to share the Department of Labor’s recently issued guidance on promoting cyber security. Cyber theft from retirement accounts makes it critical for plan sponsors to specifically educate participants on password hygiene.
Congratulations! Remember, as the funds in the retirement plan grow, you must maintain an ERISA fidelity bond that appropriately covers the retirement plan at all times, according to DOL requirements. The required ERISA fidelity bond protects the assets of your retirement plan from theft and can only be obtained from a surety listed by the U.S. Department of Treasury. That’s why plan sponsors across the country trust leading national ERISA bond provider, Colonial Surety Company. Uniquely, Colonial includes retroactive ERISA fidelity bond coverage for years when the plan was not adequately covered. Additionally, plan sponsors can opt for cost-saving multi-year coverage, ensuring the ERISA bond remains Department of Labor compliant for the life of its term.
At Colonial, along with your ERISA bond, as a plan sponsor, you can also affordably obtain fiduciary liability coverage. Importantly, this protects you—and your assets— from personal liability in the event of an alleged fiduciary breach. With Colonial’s package, the annual premium is less than what you would pay for even one hour with an expert ERISA lawyer if disaster strikes. Colonial can even help you round out your protection with cyber liability coverage. Expectations for plan fiduciaries continue to rise as the cybersecurity of retirement plan data and funds requires more and more attention. Colonial’s cyber liability insurance, included with ERISA packages, provides a smart, services-based solution to help plan sponsors successfully manage data breaches while minimizing liability for the company and plan.
Summing up: 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 quickly secure your affordable coverage package today. Take a few minutes and do it now: Complete ERISA Bond Package.
Serving customers since 1930, Colonial Surety is 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.
Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country.