As we have stressed in previous blogs, if you sponsor a defined benefit plan or act as a plan fiduciary you had BETTER make sure that you have an adequate ERISA fidelity bond. So what happens if your plan gets a Department of Labor (EBSA) audit and and you don’t have the fidelity bond? Where no plan loss have occurred the responsible fiduciary generally runs at least the risk that he/she will be assessed the “twenty percent fiduciary penalty” under ERISA Section 502(l). In the case where a fiduciary breach resulted in damages to the plan, the failure to have an ERISA bond is a federal code violation in and of itself. Failure to purchase an ERISA fidelity coverage, leaving the plan unprotected against an act of dishonesty or fiduciary breach by an individual who should have been bonded, may spread liability for those acts to a plan sponsor, member of management or other party serving in a fiduciary role even if that party had NO fault for the loss. We can’t stress how important it is to have an ERISA bond in place where required. Surety One, Inc., bonds plans with non-qualifying assets, ESOPs, labor union and multi-employer plans. NO ONE is turned away! Remember in 2013, this ERISA fidelity bond is mandatory. Visit us at www.ERISA-Bonds.com, call anytime at (787) 333-0222 or (800) 373-2804, or email Underwriting@SuretyOne.com.
