A List of 10 ‘Best of’ Lists

It is something of a tradition this time of year to look back, to reminisce about past events and lessons learned, and sometimes to look ahead.

Here are some insights from columns past that I hope have been of value in 2017 – and will continue to be in the months ahead.

5 Things You May Not Know About Roth 401(k)s

According to a variety of industry surveys, roughly 60% of 401(k) plans now offer a Roth 401(k) option, and Plan Sponsor Council of America (PSCA) data shows that 28.6% of 403(b) plans already allow for Roth contributions. Participant take-up, which just a few years ago hovered in the single digits, is now in the 15-20% range. Here are five other things you may not know about the Roth 401(k).

5 Things People Get Wrong About ERISA Fidelity Bonds

One of the most important – and, in my experience, least understood – aspects of plan administration is the requirement that those who handle plan funds and other property be covered by a fidelity bond.

5 Things You May Not Know About HSAs

Odds are that you’ve heard that health savings accounts, or HSAs, offer individuals a “triple tax advantage” – but here are five things you may not know about HSAs.

7 Reasons Why HSAs Are ‘Hot’

Health Savings Accounts, or HSAs, are hardly a new thing – they were approved by Congress in 2003 and became law in January 2004. But they are getting a lot of attention lately – here’s why.

6 Dangerous Fiduciary Assumptions

There’s an old saying that when you assume… well, here are six assumptions that can create real headaches for retirement plan fiduciaries.

20-20 Hindsights

Here are 20 things I wish I had known when I entered the workforce.

6 Assumptions That Can Wreck a Retirement

The future is an uncertain thing, and planning for uncertainty inevitably involves making some assumptions. Here are six that, done improperly, can wreck your retirement.

12 Ways That the Class of 2021’s Retirement Will Be Different

By the time the Class of 2021 entered school, laptops were outselling desktops, while on the technology front, in their lifetimes, Blackberry has gone from being a wild fruit… to being a communications device… to becoming a wild fruit again. But what about their retirement(s)?

The Value of an Advisor

Most of the attempts to affix a value to having an advisor tend to focus on investment returns or cost savings. Both are valid, objective measures that can have a real, substantive impact on retirement security. But here are five of the best values I’ve gotten from a plan advisor.

Why an Average 401(k) Balance Doesn’t ‘Mean’ Much

In recent days, we’ve gotten updates on average savings rates and 401(k) balances, and while for the very most part the reports have been positive and “directionally accurate,” I’ve always taken such findings with a grain of salt. Not so many in the press. Here are four things to keep in mind about those “average” 401(k) balances.

Even with the passage of time, there’s value in looking back even further. Here’s last year’s list (an 11th):

Things, Remembered – From 2016

Here are some insights – nearly 80 – from columns in 2016 that I hope have helped - and will continue to help lay the groundwork for a productive and prosperous New Year.

Here’s wishing everyone a happy, healthy, and prosperous 2018!

- Nevin E. Adams, JD

5 Things People Get Wrong About ERISA Fidelity Bonds

One of the most important – and, in my experience, least understood – aspects of plan administration is the requirement that those who handle plan funds and other property be covered by a fidelity bond.

While ERISA requires the bond to protect the plan from losses resulting from acts of fraud or dishonesty, fiduciaries often confuse that coverage with insurance that is designed to protect them from liability.

Here are five things you (or your client) may not know about ERISA fidelity bonding – and that, as a result, they may be getting wrong.

An ERISA fidelity bond is not the same thing as fiduciary liability insurance.

The fidelity bond required under ERISA specifically insures a plan against losses due to fraud or dishonesty (e.g., theft) by persons who handle plan funds or property. Fiduciary liability insurance, on the other hand, insures fiduciaries, and in some cases the plan, against losses caused by breaches of fiduciary responsibilities.

Although many plan fiduciaries may be covered by fiduciary liability insurance, it is not required and does not satisfy the fidelity bonding required by ERISA.

You can’t get an ERISA bond from just anybody.

Bonds must be obtained from a surety or reinsurer that is named on the Department of the Treasury’s Listing of Approved Sureties, Department Circular 570. Under certain conditions, bonds may also be obtained from underwriters at Lloyds of London. Neither the plan nor any interested party may have any control or significant financial interest, either directly or indirectly, in the surety or reinsurer, or in an agent or broker, through which the bond is obtained.

Not every fiduciary needs to be bonded.

Most fiduciaries have roles and responsibilities that involve handling plan funds or other property, and generally will need to be covered by a fidelity bond (unless they satisfy one of the exemptions in ERISA or the DOL’s regulations. However, technically an ERISA fidelity bond would not be required for a fiduciary who does not handle funds or other property of an employee benefit plan.

The plan can pay for the bond out of plan assets.

The purpose of ERISA’s bonding requirements is to protect the plan, and those bonds do not protect the person handling plan funds or other property or relieve them from their obligations to the plan, so the plan’s purchase of the bond is allowed.

You can purchase a fidelity bond for more than the legally required amount.

However, note that whether a plan should spend plan assets to purchase a bond in an amount greater than that required by ERISA is a fiduciary decision.

You can find out more about this topic here.

- Nevin E. Adams, JD