Financial Advisor Bond ~ Erisa Compliant Fidelity Bond

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Bond Penalty: Follows ERISA/Department of Labor Formula

In 1974, Congress enacted the Employee Retirement Income Security Act (ERISA) to address concerns that the assets of private retirement savings plans were being mishandled and/or criminally converted to improper uses. The primary purpose of the Act is to create enforcement provisions focused on insuring that plan assets are protected from the dishonest acts of its trustees and that participants in those plans receive the promised benefits.

ERISA section 412 and its sister regulations (29 C.F.R. §2550.412-1 and 29 C.F.R. Part 2580) require that every fiduciary of an employee benefit plan and every person who handles the assets of such a plan (referred to as "trustees") to be covered by an ERISA fidelity bond. The ERISA bond must be equal to no less than ten percent (10%) of the asset value in the plan when those assets are “qualified”. Plans containing non-qualified assets require fidelity bonding of one hundred percent (100%) of the asset balance. The maximum bond amount generally required under ERISA with respect to any one plan is generally $500,000 however, the maximum required ERISA bond amount is $1,000,000 for plans that hold employer-issued securities (ESOPs).

When the legislature passed the original Act it did not contemplate the gaping hole in coverage created by independent third party administrators and financial advisors. A standard ERISA bond does NOT provide coverage for registered investment advisers that are not also employees of the plan sponsor. We offer a specialty fidelity bond product to cover this exposure. Our ERISA-compliant fidelity bond for financial advisers offers key advantages:

  • Specialty coverage designed to support SEC and state registered financial advisers’ ERISA-specific exposures and compliance issues.
  • Can be written to cover a single plan or offered as a blanket coverage for all plans.
  • High aggregate limits available.
  • Most policies offer an “inflation guard” provision at no extra premium or fees.

Surety One, Inc. is a specialist in surety and fidelity bond underwriting. Licensed in all fifty states, Puerto Rico and U.S. Virgin Islands, we are one of the largest producers of ERISA fidelity bonds in the U.S. Our knowledge, decades of experience with ERISA bonds and our broad underwriting authorities allow us to fulfill your fidelity bond need immediately. We bond plans with non-qualifying assets, ESOPs, labor union and multi-employer plans. To receive a quote we need only a completed application from this page and schedule for the plans and assets under advisory. Call (800) 373-2804, email or click here for a real-time chat with an underwriter.

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

Erisa Bond Scenarios That Are a Nightmare If You Don't Have One

Federal law requires them. There are civil and criminal penalties for not having your plan covered by one, and if your plan suffers a dishonesty loss, you will be thankful that you paid such an inexpensive price for the ERISA bond.

Be smart with your plan and the assets of other participants! Also remember that RIA ERISA Fidelity Bond for non-sponsor exposures.

What We Need From You

Additional Attachments

  • Schedule of plan and asset balances under advisory