Now that 2017 is upon us, and employees’ 401k/retirement assets have grown, it is time to re-evaluate ERISA compliance, prior to tax time.
Integrity Surety’s ERISA Fidelity Bond helps you comply with the law and assists in protecting plan participants against dishonesty and fraud.
The Employee Retirement Income Security Act of 1974 (ERISA) states that: “Every fiduciary of an employee benefit plan and every person who handles funds or other property of such plan… shall be bonded”.
What are the required limits?*:
ERISA requires that fiduciaries have bond coverage valued at an amount that is at least:
- 10% of the plan assets handled
- $1,000 and not greater than $1,000,000 (unless the Secretary of Labor prescribes a greater amount)
*Does not take into consideration non-qualified assets as determined by statute.
What does an ERISA fidelity bond cover?:
This bond helps protect the plan and its participants against fraud or dishonesty by the bonded trustee or fiduciary.
What are the risks of not having bond coverage?:
If you do not have ERISA fidelity bond coverage and you are a victim of an embezzlement involving assets of your sponsored benefit plan(s), you could end up paying losses out of company funds, as well as pay fines or penalties for not being in compliance with ERISA. The total cost of the losses and fines could be substantial.
For more information, contact us!