Is Your Current Fidelity Bond in Compliance with ERISA?
The purpose of a fidelity bond is to protect the participants of the plan from any loss in the event of “fraud or dishonesty” that is incurred as a result of the mismanagement of funds by persons employed at the plan sponsor or who are Plan fiduciaries.
The bond is provided by a bonding company and needs to be purchased from a surety who is named on the Department of the Treasury’s listing of Approved Sureties. The retirement plan should be listed as a covered entity or there should be reference to the fact that the bond covers any ERISA plans that are sponsored by the Employer, so long as each plan can recover the amount required by ERISA. The bond forms can include the individual, name schedule (covering a number of named individuals), position schedule (covering each of the occupants of positions listed in the schedule) and blanket (covering the insured’s officers and employees without a specific list or schedule of those being covered).
To help fiduciaries ensure that the proper coverage has been obtained, Withum has put together a practice aid. For more information on how to obtain this practice aid, please email us at [email protected].
Fidelity Bonding Requirements
More information related to fidelity bonding requirements published by Withum, can be found at the following web address:
https://www.withum.com/kc/erisa-bonding-requirements/
