ERISA Bond Services — Inflation Guard Protection

Atlantic Coast Surety offers ERISA bonds that include an inflation guard endorsement. When the applicant purchases the amount required by ERISA, the endorsement automatically increases the bond penalty to the required minimum amount as qualified plan assets increase. This helps plan sponsors avoid falling below the required coverage level simply because plan assets have grown.

An inflation guard endorsement adjusts the ERISA bond penalty when plan assets rise after the required bond amount has been purchased. ERISA generally requires coverage equal to 10% of qualified plan assets, up to $500,000. The endorsement helps keep the bond aligned with that required minimum amount as asset values increase during the bond term.

An ERISA bond is required for employee benefit plans under the Employee Retirement Income Security Act of 1974. It is designed to protect the plan against losses related to dishonest acts by people who handle plan funds or assets. It is separate from fiduciary liability coverage and is based on factors such as qualified plan assets and covered plan personnel.

ERISA generally requires a bond amount equal to 10% of qualified plan assets, subject to a maximum of $500,000 for many plans. The correct amount depends on the plan’s assets and whether special considerations apply, such as non-qualifying assets, ESOP-employer securities, union funds, or multi-employer fund involvement.

Atlantic Coast Surety’s listed ERISA bond premiums range from $100 for bonds under $10,000 to $340 for $500,000 bonds. Premiums are based on a three-year term with five or fewer ratable employees, such as trustees or administrators. Rates can vary by provider, state availability, bond amount, and underwriting details.

The ERISA bonds described by Atlantic Coast Surety are continuous and billed for a three-year term. Billing options may include agency bill or direct bill. Because plan assets can change during that period, the inflation guard endorsement is especially useful for keeping the bond penalty aligned with the required minimum coverage amount.

The application typically reviews the number of employees, trustees, or administrators with direct access to plan funds. It may also ask whether the plan includes union or multi-employer funds, whether any dishonesty losses have occurred, and whether the plan includes non-qualifying assets or ESOP-employer securities that could affect underwriting.

The listed ERISA bond rates are for NGM Insurance Company only, except in Minnesota, where rates are for Spring Valley Mutual Insurance Company. The provided rates are not valid in Alaska, California, or Hawaii. Atlantic Coast Surety can help review available market options based on the plan’s state and bonding requirements.