ERISA Bonds

Why is a bond necessary for employee benefit plans?
In 1974, the Employee Retirement Income Security Act (ERISA) was enacted to regulate most types of employee benefit plans. This Act requires a fidelity bond covering a fiduciary (those responsible for managing the plan) and a person who handles funds or other property of such a plan. The coverage is intended to protect the plans from dishonesty and fraud committed by individuals who are associated with them.

What coverage amount is required?
According to the Act, the amount of coverage necessary for each plan is equal to no less than 10 percent of the amount of plan funds handled, subject to a $500,000 maximum bond amount. However, higher limits can be purchased.

ERISA not only broadened the manner in which fiduciaries can be held personally liable for breaches of responsibility, it also made it much easier for Plan participants and beneficiaries to sue successfully.

Applying for an ERISA Bond
D|A Financial Group has partnered with Colonial Surety Company to help protect fiduciaries against personal loss resulting from law suits claiming that the fiduciary was negligent in administering their company's pension or benefit plans. Click here to begin the application process.