{"id":3082,"date":"2021-07-05T20:18:12","date_gmt":"2021-07-05T20:18:12","guid":{"rendered":"https:\/\/suretyone.com\/blog\/?p=3082"},"modified":"2021-07-14T20:06:35","modified_gmt":"2021-07-14T20:06:35","slug":"dol-prosecutes-plan-without-erisa-bond","status":"publish","type":"post","link":"https:\/\/suretyone.com\/blog\/dol-prosecutes-plan-without-erisa-bond\/","title":{"rendered":"DOL Prosecutes Plan without ERISA Bond ~ Chao v. Snyder & Snyder Farm Supply, Inc."},"content":{"rendered":"

We’ve been reporting for years that there is a great deal of non-compliance with ERISA bond requirements. Our advice has always been that regardless of your plan size, number of participants or your opinion about exemptions for your plan, it is far safer to purchase the fidelity bond coverage. There is no reason to omit this small compliance item given the ease of application and the super low rates for even large amounts of bond coverage. IF you get caught without one, the Department of Labor may decide to make an example of you. The DoL did in the case of Snyder Farm Supply.<\/p>\n

Per the DoL’s press office, “A federal district court judge in Grand Rapids, Michigan, on March 28 ordered the owner of Snyder Farm Supply, Inc. to purchase and maintain an ERISA fidelity bond<\/a> for the company\u2019s 401(k) plan until the latter is terminated. Defendant Thomas E. Snyder of Alto, Michigan, also was ordered to direct the plan\u2019s custodian to distribute or roll over the accounts of plan participants. Under the consent judgment and order obtained by the U.S. Department of Labor, Snyder, who was a fiduciary of the 401(k) plan, further agreed to pay all expenses related to the distributions, rollovers or plan termination, except for annual maintenance fees charged against each plan participant\u2019s account.\u00a0The judgment\/consent order resolves the department\u2019s lawsuit, filed December 4, 2000, alleging that Snyder violated the Employee Retirement Income Security Act (ERISA) by failing to bond the pension plan offered to company employees. ERISA Section 412 requires fiduciaries of private-sector pension plans to obtain an ERISA bond in the minimum amount of ten percent of the plan funds handled by fiduciaries, to protect employee benefit plans against loss caused by acts of fraud or dishonesty.” (US DOL, V-364, 2001<\/a>)<\/p>\n

Non-compliance with the Federal Code (Sec. 412) is NO JOKE. As you may observe in the court’s order, a fiduciary is individually responsible for the plan assets and any losses incurred as a result of his or her actions (or inactions) that are inconsistent with the utmost care standard required of the same. While there are criminal remedies available to the court, the Snyder case has handled as a civil consent judgment. It could have been worse, but the lesson is the same. GET THE ERISA BOND! Application for an ERISA bond is easy. A simple six-line form is all that we need to quote standard (qualified asset) plans. The process requires less than an hour and the premiums are very inexpensive. Visit https:\/\/ERISA-Bonds.com<\/a> to access an electronic application or learn more about ERISA fidelity bonds here<\/a>. Call (800) 373-2804 or email Underwriting@SuretyOne.com for more information about an ERISA fidelity bond or other general crime policy coverages. \u00bfNecesita informaci\u00f3n y\/o solicitud para esta fianza de fidelidad en SU idioma? \u00a1F\u00e1cil! Cliqu\u00e9e aqu\u00ed<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

We’ve been reporting for years that there is a great deal of non-compliance with ERISA bond requirements. Our advice has always been that regardless of your plan size, number of participants or your opinion about exemptions for your plan, it… Continue Reading →<\/a><\/p>\n","protected":false},"author":1,"featured_media":3083,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[1614,2587,250,5,7,251,2588,105,106,2585,2586,51,2329],"yoast_head":"\nDOL Prosecutes Plan without ERISA Bond ~ Chao v. 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