{"id":3070,"date":"2021-06-20T21:59:48","date_gmt":"2021-06-20T21:59:48","guid":{"rendered":"https:\/\/suretyone.com\/blog\/?p=3070"},"modified":"2021-07-14T20:07:09","modified_gmt":"2021-07-14T20:07:09","slug":"erisa-fidelity-bond-inflation-guard-matters","status":"publish","type":"post","link":"https:\/\/suretyone.com\/blog\/erisa-fidelity-bond-inflation-guard-matters\/","title":{"rendered":"ERISA Fidelity Bond Inflation Guard ~ What it is and Why it Matters"},"content":{"rendered":"<p>Fling an ERISA bond is a fiduciary duty required by the\u00a0Employee Retirement Income Security Act of 1974 (<a href=\"https:\/\/www.dol.gov\/general\/topic\/retirement\/fiduciaryresp\" target=\"_blank\" rel=\"noopener noreferrer\">ERISA<\/a>), with few exceptions. The <a href=\"https:\/\/suretyone.com\/erisa-fidelity-bond\" target=\"_blank\" rel=\"noopener noreferrer\">bond<\/a> must be issued by a surety company that appears on the U.S. Treasury&#8217;s circular of insurers acceptable for federal obligations, referred to at the &#8220;T-List&#8221; and in an amount equal to no less than ten percent (10%) of\u00a0plan asset balance in\u00a0the preceding year. The ERISA\u00a0may not be\u00a0less than $1,000 nor greater than $500,000 unless the plan is an ESOP or holds non-qualified assets. Most plans grow in value raising the question of sufficiency of surety. An ERISA fidelity bond inflation guard speaks directly to this concern. A principal that purchases an ERISA bond in an amount equal to ten percent of assets today may be legitimately concerned about meeting the mandatory coverage months down the road. Inflation guard provisions relieve the burden on plan administrators and <a href=\"https:\/\/suretyone.com\" target=\"_blank\" rel=\"noopener noreferrer\">surety companies<\/a> by automatically adjusting\u00a0the bond penalty to match the new &#8220;ten percent&#8221; threshold.<\/p>\n<p>So what does an ERISA fidelity bond inflation guard look like and how do you know that YOUR bond includes one? The language of ERISA bonds is approved only by the Department of Labor, an agency that can and does require overhauls from time to time. Insurers that issue ERISA bonds generally include very broad terminology in order to avoid frequent rewording and the burden of form approvals. An ERISA bond inflation guard is an endorsement to primary coverage, often named an &#8220;ERISA policy limit endorsement&#8221;. Wording is very similar and look like the following, . . .<\/p>\n<blockquote><p>The most we will pay for loss in any one \u201cOccurrence\u201d is the applicable Limit of Insurance Per\u00a0Occurrence as shown [in the declarations].\u00a0However, if at the inception\u00a0date of the \u201cPremium Period\u201d during which a covered loss is discovered, the Limit of Insurance Per\u00a0Occurrence is equal to or greater than that required by the Employee Retirement Income Security Act\u00a0(ERISA) for each employee benefit plan named in the Declarations, then the Limit of Insurance Per\u00a0Occurrence that is applicable to the employee benefit plan(s) named as Insured(s), <strong>shall automatically<\/strong><br \/>\n<strong>increase to equal the amount required under ERISA<\/strong> at the beginning of the Insured plan\u2019s\/plans\u2019 fiscal\u00a0year during which the loss is discovered, or $500,000, whichever is less.<\/p><\/blockquote>\n<p>It is clear in the language in bold that no action is needed in order to maintain the appropriate bond threshold. ERISA bonds are almost universally issued with a minimum three-year duration. Would a plan sponsor or administrator be required to increase the bond at the expiration of the three-year period? Again, the ERISA fidelity bond inflation guard wording is instructive. &#8221; . . . if at the inception date, . . . &#8220;, the bond purchased is equal to no less than ten percent of assets, then NO INCREASE is required at renewal. Further, most bonds are written as continuous obligations meaning they go on and on until canceled by the surety.<\/p>\n<p>Application for an ERISA bond is easy. A simple six-line application is sufficient for the underwriting\u00a0of standard (qualified asset) plans\u00a0and the premiums are very inexpensive. Visit <a href=\"https:\/\/ERISA-Bonds.com\" target=\"_blank\" rel=\"noopener noreferrer\">https:\/\/ERISA-Bonds.com<\/a> to access an electronic application or learn more about ERISA fidelity bonds <a href=\"https:\/\/suretyone.com\/erisa-fidelity-bond\" target=\"_blank\" rel=\"noopener noreferrer\">here<\/a>. Call (800) 373-2804 or email Underwriting@SuretyOne.com for more information about an ERISA fidelity bond inflation guard or other general crime policy coverages.\u00a0\u00bfNecesita informaci\u00f3n y\/o solicitud para esta fianza de fidelidad en SU idioma? \u00a1F\u00e1cil! Cliqu\u00e9e\u00a0<a href=\"https:\/\/suretyone.com\/fianza-de-fidelidad-erisa-fidelity-bond\" target=\"_blank\" rel=\"noopener noreferrer\">aqu\u00ed<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Fling an ERISA bond is a fiduciary duty required by the\u00a0Employee Retirement Income Security Act of 1974 (ERISA), with few exceptions. The bond must be issued by a surety company that appears on the U.S. Treasury&#8217;s circular of insurers acceptable&#8230; <a class=\"more-link\" href=\"https:\/\/suretyone.com\/blog\/erisa-fidelity-bond-inflation-guard-matters\/\">Continue Reading &rarr;<\/a><\/p>\n","protected":false},"author":1,"featured_media":3071,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[250,5,2583,7,2584,105,106,51,2329],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.7.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>ERISA Fidelity Bond Inflation Guard<\/title>\n<meta name=\"description\" content=\"An ERISA fidelity bond inflation guard speaks directly to a plan sponsor&#039;s concerns that asset growth is covered with sufficient fidelity bond limits.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/suretyone.com\/blog\/erisa-fidelity-bond-inflation-guard-matters\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ERISA Fidelity Bond Inflation Guard\" \/>\n<meta property=\"og:description\" content=\"An ERISA fidelity bond inflation guard speaks directly to a plan sponsor&#039;s concerns that asset growth is covered with sufficient fidelity bond limits.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/suretyone.com\/blog\/erisa-fidelity-bond-inflation-guard-matters\/\" \/>\n<meta property=\"og:site_name\" content=\"Surety One, Inc.\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Surety1\/\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/Surety1\" \/>\n<meta property=\"article:published_time\" content=\"2021-06-20T21:59:48+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-07-14T20:07:09+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/suretyone.com\/blog\/wp-content\/uploads\/ERISA-Fidelity-Bond-Inflation-Guard.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"627\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@SuretyOne\" \/>\n<meta name=\"twitter:site\" content=\"@SuretyOne\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"C. 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