ERISA Bonds

An ERISA bond is a type of fidelity bond. There are several types of fidelity bonds—all of which protect the policyholder from losses due to fraudulent or dishonest acts.

The Department of Labor offers additional resources on ERISA bonds.

No, ERISA bonds protect the participants and beneficiaries of an employee benefit plan whereas fiduciary liability insurance protects the plan official from claims of mismanagement.

No, there are specific situations where ERISA bonds are not legally required for a business with an employee benefit plan. Some of those situations include:

• Plans with no assets: If a plan has no assets, it may be exempt from the ERISA bonding requirements.
• Plans covering only the sole owner or partners in a business: Plans that only cover the sole owner or partners in a business, where there are no other employees covered, may be exempt.
• Governmental plans: Employee benefit plans established or maintained by governmental entities are generally exempt from the ERISA bonding requirements.
• Church plans: Employee benefit plans established or maintained by churches and certain related organizations are exempt from the ERISA bonding requirements.
• Plans with assets consisting solely of employer securities: Plans with assets consisting solely of employer securities are exempt from the ERISA bonding requirements.
• Plans with assets under $1,000,000: Small plans with total assets under $1,000,000 are exempt from the ERISA bonding requirements provided they meet certain conditions.

While these exemptions exist, it’s best to consult a legal or financial advisor to ensure compliance with ERISA regulations specific to your situation.

Even if your business is not legally required to purchase an ERISA bond, it can still protect your business and employees from serious fraud and embezzlement vulnerabilities.

If you have any questions about your ERISA legal obligations, call our team today.