The turning of the years is an important time for plan sponsors to hit pause and ensure that the policies and operations of their retirement plans are sound.
Review Basic Plan Policies and Operations
Sometimes when a new year begins, we are so busy chasing down new ideas, new fangled products and “innovation” in general, that it’s easy to lose sight of some of the good solid basics that keep our lives—and our businesses humming along. This may be especially true in 2021, given the disruptions of 2020.
Legal experts offer retirement plan sponsors important advice about taking the time now to review the fundamentals of the retirement plan policies and operations. As Cohen & Buckmann suggest:
The most effective New Year’s resolution plan fiduciaries can make may be to go back to basics in 2021.… A review of the basics, ideally by partnering with your advisers and ERISA counsel, may more than pay for itself in saved penalties and audit costs and in improving the odds of winning any litigation filed by participants. If your plan hasn’t benchmarked fees or done an rfp in some time, or has never done a self-audit, those activities are a good way to start 2021 on the right note.
First Things First: ERISA Fidelity Bonds
Remember, you are required by the U.S. Department of Labor to have an ERISA fidelity bond to protect the assets of your employer sponsored retirement plan from theft. Only companies named on the Department of Treasury’s listing of approved sureties are able to provide these bonds. Keep in mind that the ERISA bond must properly cover your plan, based on its assets—and be keep up to date.
Let a national leader in the field help you: Colonial Surety Company is not only U.S. Treasury listed, but also rated “A Excellent” by A.M. Best Company. Colonial Surety Company even includes retroactive ERISA fidelity bond coverage for past years in case your plan was not properly covered. Colonial makes it easy, direct and instant to secure your required ERISA fidelity bond: Choose your ERISA Bond Package–and–Get It Instantly!
Three More Steps
As you assess the policies and operations of your company’s retirement plan, Cohen & Buckmann offer these three areas for attention.
Review Your Investment Policy Statement. Most commonly, these statements indicate that they are reviewed annually. Did you? Did you merely adopt what your investment provider shared, rather then conduct the more fulsome review of fees and advisor performance required of fiduciaries—like you, as plan sponsor?
Set Up an Effective Plan Committee. Putting a strong and qualified committee in place helps improve plan administration and can help optimize investments.
Keep Up With Compliance. Disclosure and filing deadlines must be met—and penalties can be incurred if they are not. Add due dates to your calendar and make sure your vendors and accountants have the information needed to file on time. Be sure to review the drafts provided by vendors before they are submitted.
While addressing the plan’s fundamentals at the top of the year, many plan sponsors across the country are also opting to add cyber and fiduciary liability coverage. Learn more about how these types of coverage can be especially helpful to plan sponsors.
Colonial’s unique, comprehensive and affordable packages arm plan sponsors with: the ERISA bond required to protect the assets of the retirement plan from theft; Cyber Liability coverage to safeguard your company and plan from covered losses and expenses in the event of a cyber breach; and, Fiduciary Liability coverage to protect you and your assets from personal liability.