Stressed But Sticking With The Plan



Although both retirement plan participants and sponsors have worries about  retirement plans, neither expect to make substantial changes to contributions this year. According to Ubiquity’s State of the Industry survey, fear of not having enough money for older age is not resulting in adjustments to savings.


Riding Out Another Year

Through a national study of over 1,000 clients, Ubiquity, a financial tech firm focused on small business owners, foundplenty of concern about inflation, a possible recession, and whether employees are saving enough money for retirement,” but that stress does not appear to be impacting retirement saving efforts. As Benefits Pro further reports:


The study found that 69% of plan participants expect to make no changes to 401(k) contributions, and 60% of solo 401(k) users also expect to make little to no changes to their 401(k) contributions. In addition, 74% of plan participants say they will make little to no change to their risk tolerance, and 53% of solo 401(k) users also say they will make little to no change to their risk appetite….“It’s interesting that plan participants’ desire to save enough to last in retirement does not equate to any expected changes to contribution rates…” said Chad Parks, Founder and CEO of Ubiquity. “Instead, plan participants are increasingly looking to employers to offer a retirement benefit to fuel their saving power. In addition, 28.7% of participants voted annuities as the top product they would like to see…,underscoring that savers are serious about building a lasting nest egg.…”


Although plan participants are eager for increased employer matches to retirement savings, employers, perhaps fearing recession, are not scurrying to make changes: 80% expect to continue the current match. Overall it seems that plan sponsors are ready to ride out the year, coping with “recession, inflation and poor investment returns”: 55% say are “somewhat prepared” and 31 say they are “very prepared.” Other noteworthy findings from the Ubiquity study with small businesses include:


A majority of plan participants (57%) felt they are not saving enough money for retirement. The survey also found that inflation concerns are top of mind for 55% of plan participants and 58% of solo 401(k) users. A possible recession is a major stressor for 50% of plan participants and 58% of solo 401(k) users. And poor returns on investments were also a concern among plan participant respondents, at 48.7%, and 55.8% for solo 401(k) users.


At a time when many companies are moving toward offering help with financial health as an employee benefit, there are indications from the survey that many employees may welcome such benefits.Among plan participants, a plurality, 43%, listed their financial literacy as “average.” An additional 16% listed their financial literacy as low or very low. The survey found 41% of plan participants said their financial literacy was high or very high.


Compliance—and Protection

As you steer your small business retirement plan forward for the benefit of all participants, check that your ERISA Fidelity Bond, a requirement of the Department of Labor, is current and adequately covers the plan. You may find the Department of Labor’s handout, “Protect Your Employee Benefit Plan With and ERISA Fidelity Bond,” helpful, and you can find it right here. Retirement plan sponsors across the country ensure their continuous compliance by choosing Colonial Surety’s value-packed multi-year ERISA Bond Package.


Remember, you also need to mitigate the fiduciary risks you carry as a plan sponsor. 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.