ERISA Fidelity Bonds for Plan Sponsors

An ERISA bond is a fidelity bond required under the Employee Retirement Income Security Act of 1974 for many employee benefit plans. It protects the plan against losses caused by fraud or dishonesty by individuals who handle plan funds or property, such as trustees or administrators. Atlantic Coast Surety helps determine suitable bond amounts and placement options.

Most 401(k) plans subject to ERISA need a fidelity bond if plan officials handle funds or plan property. Coverage is generally based on 10% of qualified plan assets, up to the applicable ERISA limit. Certain plans, such as government, church, or owner-only arrangements, may fall outside ERISA requirements, so plan sponsors should confirm their status.

Atlantic Coast Surety’s ERISA bond premiums are billed for a three-year term, and the bonds are continuous. That means the bond can remain in force as long as required premiums are paid and underwriting requirements continue to be satisfied. Plan sponsors should review coverage regularly as plan assets and administrators change.

ERISA generally requires coverage equal to 10% of qualified plan assets, up to $500,000 for many plans. The correct amount depends on plan assets and who has direct access to funds. Atlantic Coast Surety also considers factors such as union funds, multi-employer funds, prior dishonesty losses, non-qualifying assets, and employer securities.

Premiums are based primarily on the bond penalty amount and underwriting factors. Atlantic Coast Surety lists ERISA bond premium rates ranging from $100 for bonds under $10,000 to $340 for $500,000 bonds, billed for a three-year term. Rates shown apply to specific providers and may vary by state and eligibility.

An inflation guard endorsement helps keep coverage aligned as plan assets increase. When the applicant purchases the amount required by ERISA, the endorsement automatically increases the bond penalty to the required minimum amount as assets grow. This can reduce the risk of falling below required coverage between formal plan reviews.

Typical application details include the plan type, requested bond amount, number of employees or administrators with direct access to plan funds, and whether the plan includes union funds or multi-employer funds. Underwriting may also review dishonesty losses, non-qualifying assets, ESOP employer securities, and other plan-specific risk factors.

Yes. Atlantic Coast Surety is a bond-only agency with access to standard and specialty markets. The team can help evaluate more complex ERISA bonding needs involving multiple trustees or administrators, union or multi-employer plan concerns, prior loss history, or unique asset structures, then seek suitable options through A-rated and T-listed providers.