ERISA Fidelity Bonds

Colonial Surety - to obtain an ERISA Fidelity Bond

If your Pension Plan will benefit any employees other than the owners of the Plan’s sponsoring employer, the Department of Labor requires that any persons who handle the assets of the Trust obtain fidelity bonding. The minimum ERISA Bond coverage is for 10% of “Qualified” plan Assets. The usual cost for a $100,000 bond is about $220 for one year and about $550 for 5 years.

There is an important distinction between “Qualified” and “Non-Qualified” plan assets:

Qualified Assets
  • Assets held by banks, insurance companies, registered brokers
  • Mutual Fund shares
  • Participant loans
  • Individual investment accounts
Non-Qualified Assets
  • Assets not held by banks, insurance companies, registered brokers, mutual fund companies
    Examples: real Estate, Trust Deeds, limited partnerships, unsecured loans, collectibles
The ERISA Bond coverage requirement for “Non-Qualified” plan assets is 100%. If you have any questions about whether or not the assets for this plan are “Qualified”, please see our February 2001 Newsletter.
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