ERISA Fidelity Bond
What is an ERISA Fidelity Bond?
ERISA Fidelity Bond, also known as an Employee Retirement Income Security Act Fidelity Bond, may refer to a type of insurance that covers losses caused by dishonest acts of the employer or employees. This bond provides financial protection for employee benefit plan assets against losses caused by fraud, theft, or other dishonest acts.
ERISA Fidelity Bond in More Detail
The ERISA Fidelity Bond is a bond that protects an employee benefit plan from losses resulting from employee dishonesty, fraud, or theft. It is designed to protect the assets of a plan from losses caused by the wrongful acts of those responsible for managing the plan. In other words, it is a form of insurance that covers losses due to employee dishonesty or other wrongful acts.
The ERISA Fidelity Bond is a contractual agreement between the employer and a fidelity bond insurer, and it is required by the Employee Retirement Income Security Act of 1974 (ERISA). The bond must be in a form approved by the Department of Labor and must be written for at least 10 percent of the total plan assets. The bond must also be renewed every year, and the employer must provide the insurer with a list of plan assets each year.
The ERISA Fidelity Bond is an important component of protecting employee benefit funds. It provides a financial safeguard for the plan assets and helps ensure that they are not misused or misappropriated. Employers should review their fidelity bond coverage annually to make sure that it is sufficient to protect the employee benefit plan’s assets.
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