Benefit Management Solution
ERISA Fidelity Bond
According to Employee Retirement Income Security Act of 1974 (ERISA), an ERISA fidelity bond is a Department of Labor required insurance policy that protects the plan against losses caused by acts of fraud or dishonesty. Not only can you obtain your fidelity bond to protect against future acts, you can also purchase retroactive insurance for the years the plan was not previously covered.BFF® has partnered with Colonial Surety Company to offer ERISA Fidelity Bonds to our clients. Colonial Surety Company is a national insurance company licensed in all 50 states and all U.S. territories and has been providing insurance products since 1930. They are currently the largest direct seller of ERISA/Pension Fidelity Bonds in the U.S. and BFF® clients can typically expect to save between 10 to 30% on their annualized premium (depending upon individual coverage selections and your particular situation.)
Start saving between 10 to 30%. Just click on one of the links below to get a FREE quote or you can apply online now for immediate online issuance of your ERISA fidelity bond.
ERISA Fidelity Bond FAQs
What coverage amount is required?
ERISA § 412 and related regulations (29 C.F.R. § 2550.412-1 and 29 C.F.R. Part 2580), generally require that every fiduciary of an employee benefit plan and every person who handles funds or other property of such a plan shall be bonded. A retirement plan official must be bonded for at least 10% of the amount of funds he or she handles. In most instances, the maximum bond amount that can be required under ERISA with respect to any one plan official is $500,000 per plan or $1,000,000 for plans that hold employer securities. However, higher limits can be purchased.
Employee Benefit Plans with more than 5% of non-qualifying plan assets that are held in limited partnerships, artwork, collectibles, mortgages, real estate or securities of “closely-held” companies and are held outside of regulated institutions such as a bank; an insurance company; a registered broker-dealer or other organization authorized to act as trustee for individual retirement accounts under Internal Revenue Code §408, the Plan sponsors need to do one of two things:
- Make certain that the bond amount is equal to 100% of the value of these “non-qualifying” assets or
- Arrange for an annual full-scope plan audit, where the CPA physically confirms the existence of the assets at both the start and the end of the Plan year.
ERISA’s bonding requirements are intended to protect employee benefit plans from risk of loss due to fraud or dishonesty on the part of persons who “handle” plan funds or other property.
Do ERISA bonding requirements apply to all employee benefit plans?
No. The bonding requirements under ERISA section 412 do not apply to:
- Employee benefit plans that are completely unfunded or that are not subject to Title I of ERISA.
- Plan fiduciaries that are bank or insurance companies subject to state or federal supervision or examination, and that meet certain capitalization requirements.
- Broker/Dealers registered under Section 15(b) of the Securities Exchange Act of 1934 that are subject to the fidelity bonding requirements of a self-regulatory organization under that Act.
Is an ERISA Fidelity Bond the same thing as Fiduciary Liability Insurance?
No. The fidelity bond required under section 412 of ERISA specifically insures a plan against losses due to fraud or dishonesty (e.g., theft) on the part of persons (including, but not limited to, plan fiduciaries) who handle plan funds or other plan property. Fiduciary liability insurance, on the other hand, generally insures the plan against losses caused by breaches of fiduciary responsibilities.
Should you also be considering the purchase of Fiduciary Liability Insurance?
As a plan sponsor of an employee benefit plan, you are acting as a fiduciary. Your personal assets are at risk over the decisions you make on behalf of the plan. Fiduciary Liability Insurance will help protect your assets and cover fines, defense costs, and penalties, if you’re ever sued over an employee benefit plan. The assets in your plan pay for this coverage, Learn More. For more information on ERISA Fidelity Bonds or why you might want to purchase Fiduciary Liability Insurance to cover your personal liability, please Contact Us.
Fiduciary Liability Insurance
Under ERISA, fiduciaries may be held personally liable for a breach of their responsibilities in the administration or handling of employee benefit plans. Under ERISA § 410, the plan cannot relieve you of this responsibility with indemnification language, however, it also specifically permits fiduciaries who have personal liability to have the plan purchase Fiduciary Liability Insurance. Covering yourself with Fiduciary Liability Insurance gives you a piece of mind that you are protected. Even better, you can bundle your ERISA bond and Fiduciary Liability Insurance to receive a discounted rate.
What Fiduciary Liability Insurance Means To You
BFF® has partnered with Colonial Surety Company to offer Fiduciary Liability Insurance to our clients. Colonial Surety Company is a national insurance company licensed in all 50 states and all U.S. territories and has been providing insurance products since 1930. They are leading provider of Fiduciary Liability Insurance in the U.S. and BFF® clients can typically expect to save between 10 to 20% on their annualized premium (depending upon individual coverage selections and your particular situation.)
Start saving between 10 to 20%. Just click on one of the links below to get a FREE quote or you can apply online now for immediate online issuance of your fiduciary liability insurance.
For more information on Fiduciary Liability Insurance, please Contact Us.