Cyber for Plan Sponsors

What Did You Say?


Plan sponsors across the country are leaning in to employee interest in better understanding their retirement finances and plan options. Efforts to provide increased financial education and access to advisors are underway. Curbing financial jargon is also on the wish list.


What Did You Say?

Since workers are trying harder then ever to save, they are eager to better understand and fully leverage all the features of employer sponsored 401(k) plans. Employer efforts to go the extra mile with related communications are appreciated. With a renewed focused on providing ever more clear information to a diversity of participants, plan sponsors find that much of the jargon used in the retirement plan industry is confusing and off-putting. Recently, for example, the Plan Sponsor Council of America asked plan sponsors about words and phrases they wished providers and advisors would refrain from using. Responses included:


  • 401k savings vs. social security benefits upon retirement
  • annuities
  • Budget – should use the words ‘Spending Plan’.
  • Deferral
  • Deferral
  • Distribution
  • Diversification
  • Future investment elections
  • Hardship
  • How compound interest works and how it can help you save
  • Loan Default
  • Loans
  • Matching
  • safe harbor — need to explain what it means — employees don’t understand the term
  • True-up


Toward Clarity

Previous studies point plan sponsors and service providers toward the kinds of phrasing that might make the company sponsored retirement plan more understandable. For example, research conducted by Empower with the Harris Poll found:


Respondents said their desired language would be brief, concise or direct; efficient; simple or easy to understand; informative or educational; relatable; participant-centered; personalized; and engaging or attention-grabbing. For example, instead of “asset allocation,” Empower recommends using “investment balancing.” Instead of the acronym “IRA,” use “personal retirement account” or its full name, “individual retirement account.” Additionally, respondents in the survey preferred “complete financial picture” rather than “holistic financial view,” and “certified financial adviser” rather than “fiduciary adviser.” Thirty percent of participants in the report also preferred that an adviser be described as “a financial professional that must legally act in your best interest.”Participants were also more likely to understand the term ‘investment balancing,” rather than “diversification,” “asset allocation,” “portfolio distribution,” or “investment allotment.”


Toward Financial Wellness—and Risk Management Too

As employer sponsored retirement plans advance in response to employee interest, the top five financial wellness benefits they aim to include are:


  • retirement matching/401(k) (70%);
  • financial planning tools (69%);
  • access to a financial planner/advisor (63%);
  • financial education, seminars or courses (61%); and
  • budget planning tools (58%).


Plan sponsors are also working harder then ever to get their ERISA fiduciary duties right–and put protections in place for themselves. Since any person involved in the management of a retirement plan can be held personally liable for breach of fiduciary duties, defense costs alone can be devastating in the face of allegations. Colonial Surety is here to help. Our multi-year packages enable plan sponsors to secure Fiduciary Liability Insurance at locked in rates with annual premiums that cost less then one hour of ERISA legal advice. We even include Basic Cyber Liability Insurance. We make it so efficient and reasonable that you can secure insurance in minutes, now:

Fiduciary with Cyber Liability Insurance.

Armed with Colonial’s Fiduciary-Cyber Pack, if you face claims of alleged or actual breaches of duty in connection with the employee retirement plan, you’ll be covered for defense costs and penalty limits up to $1,000,000. Plus, in the event of a cyber breach, your business—and plan—will receive support at every stage of incident investigation and breach response, as well as coverage against lawsuits or regulatory actions related to the breach.


High Expectations

Industry experts remind plan sponsors to have high expectations when contracting with—and monitoring service providers. For example, do your plan service providers excel at giving participants high quality, data-rich information, and education? If not, how can it be improved? With the growth in requests for plan materials in languages other than English over the past several years, be sure too that the ERISA requirement for providing assistance to non-English speakers is being met.


Because it can be challenging to keep current on all ERISA regulations, plan sponsors across the country find it reassuring to secure Colonial’s  Three Point Coverage Package. This gives plan sponsors the greatest value and protection, providing:

the required ERISA bond to protect the assets of the retirement plan from theft; Fiduciary Liability coverage to protect you and your assets from personal liability; and, Cyber Liability coverage to safeguard your company and plan from covered losses and expenses in the event of a cyber breach.


Three Point Coverage Package: Right Here Now.


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, US Treasury listed and in business all across the country.