What do heroes, heartbreaks and hopes have to do with sponsoring a 401k plan? A whole lot when we pause to remember: ultimately, our duties as fiduciaries are about people—people who aspire to healthy and happy retirements–just like us. Though it can be easy to get lost in the sea of compliance protocols, pausing to consider our personal histories can make us ever better stewards.
Decision-Making
Plan sponsors have the ultimate responsibility for retirement plans, participants and beneficiaries–and that involves lots of decision-making. Which third party administrator can best serve the plan? What are the right investment options? Have communications been appropriately sent to all participants? Is enough being done to mitigate cybersecurity threats? What about the missing participants? The list goes on and on, but as important as it is to take ERISA fiduciary responsibilities seriously, we can’t lose focus on why we sponsor plans in the first place. At Be More Than a Fiduciary, Eric Dyson shares a heartfelt reminder:
Being an ERISA fiduciary isn’t just about policies, regulations, or investment decisions—it’s about people. Behind every decision we make, there’s a deeper foundation: our personal experiences, values, and motivations. Who we are as individuals shapes how we approach leadership, stewardship and governance of ERISA retirement plans….Our personal histories often drive our sense of duty. Maybe you watched a family member struggle financially in retirement, and that fuels your commitment to ensuring participants have a secure future. Or perhaps a past leadership experience taught you the importance of transparency and accountability—values that now guide your fiduciary role. If your hero is someone who stood up for others, that might influence how you advocate for plan participants. If they were known for their discipline and integrity, perhaps those traits drive your approach to governance and compliance.
Retirement plan sponsorship has always been an important way to help others, but the realities of longer lives and higher costs of living make sponsoring a thriving plan ever more critical. Let’s face it, if plan fees go unchecked, investment options are not carefully thought out, or participant communications are unintelligible, it’s unlikely a retirement plan will achieve the ultimate outcome: more successful older ages for more people. As Groom Law Group points out: “Being a fiduciary is about more than just avoiding lawsuits—it is about improving participant outcomes.” To that end, tune in to the human side of the responsibilities. As Dyson observes, “Hope is what drives us forward. It keeps us engaged, committed, and passionate about the work we do. As fiduciaries, having a vision for a better future helps us remain focused on why our work matters.” Toward rekindling your own hopes as a plan sponsor try reflecting on these questions:
- What excites you about the future—personally and professionally?
- How do you want to leave things better than you found them?
- What’s one thing you hope changes for retirement plan participants?
- Do you have a view of the legacy you wish to leave behind? How would you want people to describe you once you have retired or even near the end of your time on earth?
Obligations and Care Too
Being grounded in the human hopes that are at the essence of retirement plans is a great mindset to bring to the responsibilities of being a fiduciary. As retirement plan sponsors, we can make a substantial difference in the lives of employees–and their beneficiaries. It’s also true that despite diligence, unforeseen challenges can arise, and even seemingly small oversights are known to trigger costly investigations, audits and even lawsuits. The average ERISA claim costs businesses over $1.2 million in legal fees.
You don’t have to shoulder all your risks alone, though: Colonial Surety Company makes Fiduciary Liability Insurance affordable for every plan sponsor. With this protection, for a few dollars a day, you’ll have coverage for defense costs and penalty limits up to $1,000,000 if faced with alleged or actual breaches of duty in connection with the employee retirement plan. Cyber Liability coverage is included at no extra cost, providing additional protection against regulatory actions related to data and privacy, as well as expert response services in the event of a cybersecurity breach. You can easily add our Fiduciary+Cyber Liability Insurance to your ERISA Bond in minutes, today:
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