Where Do You Stand?



With workers reporting heightened fears about not having enough income to retire, plan sponsors are becoming increasingly active with retirement plan design. Specifically, a new survey by PGIM finds that plan sponsors are educating themselves on the possibilities of retirement income vehicles.


Confident? Not Really!

Seven in 10 Americans report feeling behind on achieving life goals, according to a recent survey conducted by Prudential. Responses from 2,000 adults of all ages reflect a major lack of confidence in the ultimate ability to retire. Five of the specific findings from the survey include:


  • 70% of Americans plan to retire but are unsure that they actually will.
  • 40% indicate that lack of savings is a “primary concern.”
  • 28% report not having a solid understanding of retirement planning.
  • 59% have never opened a retirement account.
  • 65% do not know about or have an individual retirement account (IRA).


The Employee Benefit Research Institute (EBRI) has also found a dip in confidence when it comes to the ability to retire, reporting: “overall confidence in retirement savings fell for the first time since the 2008 recession.” Data from research by Voya reveals that Black and Latino employees “were likelier than all other demographics to experience lower levels of financial confidence.” Pointing to the importance of robust employer sponsored retirement plans, industry leaders urge plan sponsors to “expand access” and underscore: “To expand access is to take a more holistic approach when it comes to helping those achieve retirement….That approach includes technology, education, and products and solutions that actually meet the needs of consumers wherever they’re at in life.”


Steering Forward

Toward expanding options to address current participation needs, it appears that plan sponsors are increasingly interested in retirement income vehicles. Though only a relatively small percentage of plan sponsors have moved to incorporate guaranteed income options into retirement plans, a growing number are seeking to educate themselves about retirement options. Specifically, according to a recent survey by PGIM:


34% of plan sponsors are in the initial stages of learning about retirement income approaches, while 14% are in the process of better understanding participants’ retirement income needs. Just 3% are formally evaluating whether to add retirement income solutions to their 401(k) menu, and 8% are in the process of evaluating specific retirement income solutions/products to add to their plan. Seven percent of plan sponsors are implementing—or have already implemented—a retirement income solution/product, 8% have evaluated retirement income solutions but ultimately decided not to pursue, and 27% say retirement income approaches are not a topic of interest or need at the time.


Of the plan sponsors pursuing an approach, stable value (70%) and the income fund of a target-date fund (TDF) series (46%) are the most offered vehicles, with annuities, long-duration fixed income funds, and managed accounts the most likely to be considered for future inclusion, finds PGIM.


Plan sponsors are wise to remember that even with great diligence to plan design and operations, mistakes happen—and being held personally liable is a real possibility. That’s why protection is essential. With affordable fiduciary liability insurance from Colonial Surety, 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. Uniquely, Colonial even includes Cyber Liability Insurance, locks in multi-year rates and offers installation payments. Conveniently, our Fiduciary With Cyber liability package is now available with a one year commitment. Protect yourself and your business, for a few dollars a day, in minutes, now:


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Mandates—and Options Too

With the retirement industry buzzing about the massive SECURE 2.0 legislation, experts remind plan sponsors that in addition to taking action to comply, they should also consider the many optional provisions that could position the company plan to better meet the needs of employees. As experts encourage: “This is a great opportunity for committee members to take a step back and ask whether their plan is the way the that they want it to look….Start with those internal conversations about employee needs, and what are the changes that you have been wanting to take action on?”


Experts also remind us that whenever considering new plan design options and exploring innovative features offered by third party providers, it is critical for plan sponsors to fully understand the implications related to both compliance requirements and costs. Never forget to inquire about the specific fiduciary responsibilities providers are taking on—and always remember: plan sponsors can never fully eliminate their own fiduciary risks. Fortunately, fiduciary liabilities can be reducedand Colonial Surety is here to help with affordable fiduciary liability insurance. Armed with our coverage, if you face claims of alleged or actual breaches of duty in connection with the employee retirement plan, you’ll have protection. Conveniently, our Fiduciary With Cyber liability package is now available with a one year commitment. Cover yourself and your business, for a few dollars a day, now:


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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. We help safeguard plan sponsors, pension professionals and financial advisors — and keep their businesses compliant — with pain-free, efficient, and friendly service every time.