Since we write a looooooooooooot of of ERISA fidelity bonds, we get this particular question very frequently.  The best “legal” definition is contained within the U.S. Department of Labor’s circular FAB 2008-04.  An ERISA section 412 bond must protect the plan against loss by reason of acts of fraud or dishonesty on the part of persons required to be bonded, whether the person acts directly or through connivance with others.  The term “fraud or dishonesty” for this purpose encompasses risks of loss that might arise through dishonest or fraudulent acts in handling plan funds or other plan property. This includes, but is not limited to, larceny, theft, embezzlement, forgery, misappropriation, wrongful abstraction, wrongful conversion, willful misapplication, and other acts where losses result through any act or arrangement prohibited by 18 U.S.C. § 1954. The ERISA bond must provide recovery for losses occasioned by such acts even though no personal gain accrues to the person committing it and the act is not subject to punishment as a crime or misdemeanor, provided that within the law of the state in which the act is committed, a court would afford recovery under a bond providing protection against fraud or dishonesty. Retentions (deductibles) that transfer some portion of the liability to the plan are not allowed.

We hope that this helps you with a better understanding of the ERISA bond “concept”.  National surety leaderSurety One, Inc., is one of the largest writers of ERISA bonds.  We offer:

ERISA bonds for plans with non-qualifying assets;

ERISA bonds for ESOPs,

ERISA bonds for labor union and multi-employer plans;

and erisa bond limits to $5 million.

Visit us at, call anytime at (787) 333-0222 or (800) 373-2804, or email for an ERISA bond application or any bonding need.