ERISA AND LIABILITY INSURANCE INFORMATION
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.
ERISA mandates qualified plans be covered by a fidelity bond. The minimum bond amounts required must be for a least 10% of plan assets as of the beginning of the plan year plus the anticipated contribution for the plan year or $1,000, whichever is greater. The maximum bond required is generally $500,000.
Every administrator, officer, and employee of any plan who handles funds or other property of such plan must be bonded. The bond protects the plan against loss “by reason of acts of fraud or dishonesty” on the part of an administrator, officer, or employee.
Fiduciaries have important responsibilities and are subject to standards of conduct because they act on behalf of participants in a retirement plan and their beneficiaries.
With the additional focus on fiduciaries and their responsibilities for ERISA plans, many employers are discussing fiduciary liability insurance.
ERISA section 410 allows a plan to purchase insurance for its fiduciaries or for itself covering losses occurring from fiduciary breach.
We have partnered with Colonial Surety Company, a leading provider of ERISA/Pension Fidelity Bonds. They are a national insurance company registered in all 50 states and all U.S. territories, providing insurance products since 1930. They are the largest direct seller of ERISA/Pension Fidelity Bonds in the U.S.