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Certification

ERISA Bond Requirements

Learn the criteria...

Bonding Requirements

Every fiduciary and every person who handles plan fund must be bonded as required by ERISA §412.  Funds handled by a person whose duties or activities are such that there is a risk that such funds could be lost in the event of fraud or dishonesty.

Amount Of Bond

The amount of the bond must be fixed at the beginning of each Plan Year in an amount that is not less than 10% of the amount of funds being handled.  The amount of the bond may not be less than $1,000, even if 10% of the amount of funds being handled would permit a smaller dollar amount, and need not be greater than $500,000, even if 10% of the amount of funds being handled would otherwise require a larger dollar amount.  A blanket bond may be purchased that covers all persons who handle funds.

When purchasing your bond, plan ahead.  Estimate as closely as possible the value of the plan in 3 years as most bonds are issued in 3 year blocks.

The Pension Protection Act of 2006 increased the maximum bond amount to $1 million for a plan that holds employer securities, effective for plan years beginning in 2008 or later.  The 10% rule would still apply, so the amount of the bond would be the lesser of 10% or $1 million.

See your insurance agent to see if they offer ERISA or Fiduciary Bonds or click here to purchase a bond.

 

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