Risks Involved With Employee Benefit Plans
Many of today’s businesses feel that it is their responsibility to offer benefits for their employees. Certain employee benefits like a retirement account are extremely appealing to employees. However, it is important to recognize the risks involved with these plans. It might also be smart to invest in fiduciary liability insurance.
One of the biggest risks involved with ERISAs is insufficient funding. The employer has fiduciary responsibility to adhere to the funding requirements. This includes remitting the employee’s payments on time and abiding by the company match policy. Insufficient funding can have long-term consequences, and it may result in a lawsuit.
Breach of Duties
When an employer provides benefits to their employees, they usually have specific duties to adhere to. When they fail to live up to their end of the agreement, an employee can file suit. The cost of these lawsuits can be extremely expensive, and it can cause many businesses to suffer financially. Failure to adhere to the fiduciary responsibilities can also diminish a business’s reputation.
With fiduciary liability insurance, many of the risks involved with employee benefit programs are lessened. If mistakes are made, they are often resolved quickly and effectively so the business can continue operating. Contact an insurance agent today for more information so you can lower your risks.