PENSION TRUST / ERISA Fidelity Insurance Surety Bonds
PENSION TRUST/ERISA FIDELITY INSURANCE BONDS
A Bond Designed to Protect Your Valuable Pension Programs
What are Pension Trust/ERISA Bonds?
Many companies today offer pension plans and/or profit sharing programs as part of a benefit package for their employees. These programs are managed by appointed individuals associated with that company’s plan, known as fiduciaries. To protect the plan and the money in these funds from fraud and dishonesty, the appointed fiduciaries need to be bonded. The pension trust bond does just that.
Why Is This Bond Needed?
The Pension Reform Act of 1974 (also known as ERISA - Employee Retirement and Income Security Act) states that the funds of pension or profit sharing plans must be protected under a fidelity bond for 10% of the amount of qualified funds handled, plus 100% of non-qualified funds.
As an example, a person who manages a profit sharing program that involves $300,000 in funds must post a bond for $30,000. The Commercial Blanket fidelity bond available satisfies this requirement at a reasonable cost. If the same program had $100,000 in non-qualified assets then a $120,000 bond will be required.
What determines qualified vs. non-qualified?
Qualifying plan assets are those held by a financial institution, such as a bank, insurance company, broker/dealer or regulated entity, mutual funds, participant loans, qualifying employer securities and self directed individual account plans.
Non-qualifying plan assets are those not held by a bank or financial institution. For instance, a limited partnership, artwork, collectibles, mortgages, real-estate and securities of "closely held" companies are examples of non-qualified plans.
Bonding Requirement Changes
Increased Bond Limits
The Act raises the maximum bond amount to $1,000,000, from the previous $500,000, for a plan that holds employer securities, regardless of whether a bonded person actually handles employer securities.
Relief for Broker-Dealers
The Act provides relief from the fidelity bond requirements of ERISA for SEC-registered broker-dealers that are subject to the fidelity bond requirements of a self-regulatory organization.
Fast Qualified ERISA bonds issued up to $500,000
Start HERE for the applications and rates
Quick ERISA Bond Quote - All States -
NEED AN ERISA BOND
and Easy New Program Application -
NON-QUALIFIED ERISA Bonds
Available for all states
Start HERE for Application Instructions