ERISA Bond
Bond Details
Employee Retirement Security Act (ERISA) bond
| Bond Amount | Term | Cost |
| At least 10% of prior year's plan funds* | 3 years | $150-$550 |
*Minimum $10,000, Maximum $500,000
Overview
ERISA bonds, sometimes referred to as 401(k) fidelity bonds, protect the plan, its participants, and beneficiaries from losses due to theft, embezzlement, forgery, misappropriation, and other dishonest acts. Individuals who handle funds or property of an employee benefit plan must hold an Employee Retirement Income Security Act (ERISA) bond.
How ERISA Bonds Work
An ERISA bond helps protect the plan’s participants and beneficiaries from financial loss should the plan official mishandle the funds. If a claim is made against a plan official for theft or other dishonest act, the surety company will investigate the claim to confirm its validity.
If the claim is valid, the surety will compensate the claimants up to the bond policy amount and the plan official must reimburse the surety for any damages paid out.
Get Your ERISA Bond With Us
NNA Surety can help you meet ERISA bonding requirements today. To get your ERISA fidelity bond, have the following information ready when you complete our form:
- Plan information: Name of employee benefit plan, address, and contact information
- Plan sponsor information: Current total plan assets, address, and business name
If you have any questions about the process, call us for more information.
An ERISA bond is a fidelity bond used to protect people participating in employee benefit plans, such as a defined benefit plan, a pension fund, or a 401(k) plan.
Cost of an ERISA Bond
The cost of an ERISA bond is on average about 1% of the bond amount for a three-year term.
Each individual with access to funds must hold a surety bond with coverage of at least 10% of the funds they handled in the previous year. The minimum bond amount is $1,000 and the maximum bond amount is $500,000.
For plans that hold employer securities, the maximum bond amount is $1,000,000. These amounts apply to each plan named on a bond.
Purpose of an ERISA Bond
ERISA bonds are a crucial part of any business that offers its employees benefits in addition to their hourly or salaried compensation. These bonds ensure the money employees pay into their benefits plans is used appropriately.
Created by the Employee Retirement Income Security Act of 1974, ERISA created federal laws and a regulatory framework to support and govern employer-sponsored retirement plans and their administration. The goal was to protect employees who enrolled in these plans.
Get Your ERISA Fidelity Bond
NNA Surety offers the ERISA fidelity bond in all 50 U.S. states. Learn how much ERISA bond coverage your business needs by calling us or sending us an email.