ERISA Bonds Business

An ERISA fidelity bond is a type of insurance that protects the plan against losses caused by acts of fraud or dishonesty. Almost all retirement fund are require do be bonded.

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Customer

Every person who “handles funds or other property” of an employee benefit plan

Coverage

ERISA Fidelity Bonds cover losses from theft and fraud

At least 10 percent of the plan assets that are handled and
A minimum of $1,000, and a maximum of $500,000 (or $1 million for retirement plans that hold company stock)
Claim payments are made to the retirement plan

Cost Factors

Coverage limit purchased
Number of people covered
Assets in the plan

Claim Examples

Funds are transferred out of the plan
Forgery
Misappropriation
Theft
Misapplication of funds

One of ERISA’s most important requirements is that plan administrators with fiduciary duties obtain surety bonds. Since these plan administrators have substantial power over employees’ retirement funds, it’s crucial that employees be protected in the event that an administrator commits misconduct. An ERISA bond is a tool that’s intended to provide that protection.

An ERISA Bond is not Fiduciary Liability insurance. The ERISA bond protects the plan’s participants, but a Fiduciary Liability policy protects the administers of the plan.