A fidelity bond for a standard qualified, non-qualified, ESOP, MEP and an ERISA bond for a 403(b) plan (with an exception for certain church-sponsored accounts) is required to comply with the Act (ERISA). Per the U.S. Department of Labor’s circular, “The Employee Retirement Income Security Act (ERISA) regulates the creation and management of pension and benefit plans of private sector employers and those that invest and manage their assets (plan sponsors and third-party administrators, inclusive). The provisions of ERISA were promulgated to address public concern that funds of private pension and other employee benefit plans were being mismanaged or simply stolen. One of ERISA’s requirements is that people who handle plan funds and/or other property that belong to plans be covered by an ERISA fidelity bond to protect the plan from losses due to the fraudulent or dishonest acts of plan fiduciaries.” There are VERY few exceptions to the bonding requirement.
Per the IRS (Federal Code), “A 403(b) plan (also called a tax-sheltered annuity or TSA plan) is a retirement plan offered by public schools and certain 501(c)(3) tax-exempt organizations. Employees save for retirement by contributing to individual accounts. Employers can also contribute to employees’ accounts.” An ERISA bond for a 403(b) plan may be waived only if the plan is sponsored by governmental and public education employer or sponsored by religious organizations that meet specific requirements. A plan sponsors obligations with regards to clearly written plan language, distribution, annual check-ups, choice of Form 5500 filing or its omission, etc., are complex. Lack of strict compliance can result is serious sanctions. If all exemption criteria are met then an ERISA bond for a 403(b) plan is not required to cover the sponsor however if any outside experts or external vendors are retained to assist with plan managment then those parties must be covered by an ERISA fidelity bond. The safe inexpensive solution is simply to purchase a bond.
Unless a plan is not subject to Title I of ERISA (churches and government entities as discussed above), each plan fiduciary must be covered in an amount equal to at least ten percent (10%) of the plan assets handled in the preceding year. The bond may not be less than $1,000 nor more than $500,000 unless the plan holds employer-issued securities in which case the maximum limit is $1,000,000. Application for an ERISA bond for a 403(b) plan is easy. A simple six-line application is sufficient for underwriting purposes and the premiums are relatively inexpensive. Visit https://ERISA-Bonds.com to access an electronic application or learn more about ERISA fidelity bonds here. Call (800) 373-2804 or email Underwriting@SuretyOne.com for more information about an ERISA bond for a 403(b) plan. ¿Necesita información y/o solicitud para esta fianza de fidelidad en SU idioma? ¡Fácil! Cliquée aquí.