Fidelity Bonds for 401(k) and Retirement Plans


Understanding ERISA Bonds

How do I know if I need an ERISA bond?

In 1974, the Employee Retirement Income Security Act (ERISA) was enacted to regulate most types of employee benefit plans. This Act requires that a fidelity bond be in place to cover the fiduciary (those responsible for managing the plan) and those persons who handle funds or other property of such a plan. These bonds are intended to protect the plans from dishonesty and fraud committed by individuals who are associated with them. Please see the "Federal Bond Regulations" page on this website to help you find the current requirements. If you can't find the answers you're looking for, contact one of our customer service representatives to help you complete your application.

What coverage amount is required?

According to the Act, the amount of coverage necessary for each plan is equal to no less than 10 percent of the amount of plan funds handled, subject to a $500,000 maximum bond amount. However, higher limits can be purchased.

What is the purpose of an ERISA bond?

The ERISA bond is required to protect the participants and beneficiaries from dishonest acts of a fiduciary who handles the plan assets. ERISA requires every plan to bond any fiduciary and all other persons who handle plan assets.

How is an ERISA bond different than an insurance policy?

Unlike an insurance policy, the bond does not step in and pay losses for you. The bond guarantees that you will be able to pay any losses up to the face amount of the bond. The bond will only pay in your stead in the event that you are financially unable to meet your obligations.

How do I apply for an ERISA Bond?

ERISABondCenter is the easiest and most affordable method to securing your bond. Let us show you how our streamlined process will reduce the cost and help you avoid the confusion. Click here to start the process: Apply Now

Apply for your ERISA bond online.