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An ERISA fidelity bond is a type of insurance required under the Employee Retirement Income Security Act of 1974. This fidelity bond ensures that plan assets remain protected in case of acts of fraud, wrongful conversion, larceny, or willful misapplication by those who handle plan funds.
An ERISA Bond is a fidelity bond designed to protect employees who are participants of an employee benefit plan. The bond guarantees that money will be available to the participants in the event that a fiduciary mishandles the funds that were entrusted to them.
Need to purchase an ERISA Bond? Apply here or call one of our team members today to see how to get started.
Under ERISA bonding requirements, the U.S. Department of Labor (DOL) mandates that individuals handling plan funds obtain a fidelity bond. The required bond amount must be equal to at least 10% of the plan’s total assets for the fiscal year, ensuring sufficient bond coverage.
Certain plans, such as governmental plans, unfunded plans, and church plans, may be exemptions from these requirements.
The bond amount for an ERISA fidelity bond must be at least 10% of the maximum plan assets held during the fiscal year. The cost typically ranges from 1% to 3% of the total bond amount, depending on factors like underwriting, the surety company, and the insurance company providing coverage. With over 25 years of experience, our team specializes in securing low-cost fidelity bonds for plan sponsors, plan administrators, and service providers. Call us today to get a competitive quote on your ERISA bond coverage.
An ERISA bond is required by the Employment Retirement Security Act to provide employees with protection from dishonest or fraudulent acts at the hands of the administrators of their employee benefit plans.
The Department of Labor (DOL) enforces fidelity bonding requirements to protect plan participants and beneficiaries from financial losses due to embezzlement, disbursement mishandling, or misappropriation of plan assets.
Common Risks Covered:
Without proper bond coverage, companies and plan sponsors may face penalties under the U.S. Department of Labor regulations.
Call our office to provide us with your application information so we can give you an accurate quote.
Submit the necessary information to our underwriters so they can begin the bond process.
Once approved by our underwriters, we will issue the ERISA fidelity bond.
Have more questions? Give us a call today at (877) 841 6745.
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An ERISA fidelity bond protects against fraud and dishonesty, while fiduciary liability insurance covers breaches of fiduciary responsibilities beyond criminal acts.
A surety company or insurance company authorized by the Department of the Treasury under Department Circular 570.
Yes, church plans, governmental plans, and unfunded plans may be exempt.
The required amount of coverage must be at least 10% of the plan assets handled by a plan official during the fiscal year, with a minimum of $1,000 and a maximum of $500,000 (or $1,000,000 for plans holding employer securities).
No, an ERISA fidelity bond must be issued by a surety company or insurance company that appears on the Department of the Treasury’s Listing of Approved Sureties. Some bonds may also involve a reinsurer for additional financial backing.
No, deductibles are not allowed on ERISA bonds because they must provide full bond coverage for the required amount of coverage without any out-of-pocket costs to the plan participants.
An ERISA fidelity bond is required to protect plan funds from embezzlement, wrongful conversion, or disbursement fraud, whereas a fiduciary liability insurance policy provides broader protection for fiduciary responsibilities but does not fulfill ERISA bonding requirements.
No, physical contact is not required. Anyone with access to negotiable instruments, disbursement authority, or control over plan transactions may be required to obtain bond coverage to comply with ERISA bonding requirements.
Certain financial institutions serving as service providers to employee benefit plans may be exempt if they meet specific Department of Labor (DOL) exemptions. However, non-exempt providers handling plan funds must secure the appropriate fidelity bond.