Pursuant to Federal Code (ERISA) and the Rules promulgated by the U.S. Department of Labor for implementation of the Employee Retirement Income Security Act of 1974, each and every employee benefit plan except for very few exceptions must purchase and maintain in effect an ERISA fidelity bond. Per the D.o.L., the ERISA bond covers the acts of all of those “who exercise discretionary control or authority over plan management or plan assets, have discretionary authority or responsibility for the administration of a plan, or provide investment advice to a plan for compensation or have any authority or responsibility to do so are subject to fiduciary responsibilities.” To-date many surety companies have been less than willing to provide fidelity bonds to multi employer plans. That may have to change soon.

In August of 2018, the President signed an executive order strengthening retirement plan security, called the “Multi Employer Plan Rule”. The MEP Rule states specifically, ““Expanding access to multiple employer plans (MEPs), under which employees of different private-sector employers may participate in a single retirement plan, is an efficient way to reduce administrative costs of retirement plan establishment and maintenance and would encourage more plan formation and broader availability of workplace retirement plans, especially among small employers.” The D.o.L.’s final rule on MEPs was published in July,2019, and took effect in September of 2019. The protocols will enable small businesses, trade groups, chambers of commerce, PEOs, and the like to offer participants in a retirement plan lower fees and simplified administration. What are the practical effects?

  • An MEP will file a single 5500 and may post one ERISA fidelity bond for the entire MEP.
  • MEPs will be able to pool expenses while still retaining the autonomy of each employer to choose plan features to its own needs.
  • The greater use of the MEP structure will reduce sponsors’ costs of sponsoring a benefit plan and effectively transfer substantial legal risk to professional fiduciaries rather than single sponsors.

National fidelity bond leader, Surety One, Inc. is a specialist in the ERISA bond needs of defined benefit plans. We offer both surety and fidelity bonds needed by plan sponsors in ALL fifty states, Puerto Rico and the U.S. Virgin Islands. Questions about an ERISA fidelity bond? Call us at (800) 373-2804, email us at Underwriting@SuretyOne.com, click here for live chat or begin your application at https://ERISA-Bonds.com.

ERISA bond application review and quoting are free of charge. There is no obligation to purchase.