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Toll Free: 866-430-3322 7:30AM - 4:30PM MST
Want to stay connected and learn about Bonds? Sign up for our newsletter!
The Employee Retirement Income Security Act of 1974 (ERISA) requires that anyone who handles funds or property of a covered employee benefit plan must be bonded. This is not optional. The bond, known as an ERISA fidelity bond, protects plan participants from financial losses caused by fraud, dishonesty, or embezzlement by those managing plan assets.
Who needs an ERISA bond? Plan trustees, administrators, officers, and employees with authority to transfer or disburse plan assets are required to be bonded. Certain third-party service providers who handle plan funds directly may also be required. Church plans, governmental plans, and completely unfunded plans are generally exempt. |
ERISA compliance carries real consequences. A missing or insufficient bond can result in Department of Labor penalties and put plan participants at risk. The good news: for most plans, obtaining the right bond is straightforward and affordable.
The bond must equal at least 10% of the amount of plan assets handled in the prior plan year, with a minimum of $1,000. No deductible is permitted, and the bond must be issued by a surety company approved on the Department of the Treasury’s Circular 570 list. All ERISA bonds issued through Surety Place meet this requirement.
The ERISA bond protects the plan and its participants. It does not protect the person handling plan funds. Plan sponsors who want complete protection should carry both the bond and the insurance.
The Department of Labor’s recent update to the Voluntary Fiduciary Correction Program is a good reminder that ERISA compliance continues to evolve. Effective March 17, 2025, the update added a self-correction feature for certain late deposits of participant contributions and related issues, giving plan sponsors a more practical way to address problems before they turn into larger compliance concerns. That makes it a timely development for employers and fiduciaries who want to stay ahead of potential issues rather than react after a problem is discovered.
For plan sponsors, the bigger takeaway is that compliance is not something to set once and forget. Plan assets, payroll volume, staffing, and fiduciary responsibilities can all change during the year, which means a policy or bond amount that was adequate at one point may no longer be sufficient later on. That is why annual reviews are so important: they help confirm that procedures are current, records are in order, and fiduciary protections are still aligned with the actual size and activity of the plan.
ERISA Bonds should be reviewed every year to make sure it still reflects the plan’s current assets and the individuals handling plan funds. As plans grow, under-bonding can happen quietly, even when everything looked compliant earlier in the year. Regular annual reviews help reduce that risk, support audit readiness, and give sponsors confidence that their plan is properly compliant. The Surety Place makes annual bond reviews easy by helping clients stay current, avoid coverage gaps, and keep their plan protected.
June brings the official start of summer, and with it a stretch of long days that are easy to fill with work and all too easy to let pass without making it count. Whether it is a national park, a local trail, a backyard barbecue, or just a long evening walk, it counts. The research proves time spent outside reduces stress, improves focus, and generally makes people better at everything, including their jobs.
June 21st is the summer solstice — the longest day of the year in the Northern Hemisphere, and a pretty good excuse to step outside before the sun goes down. June is also National Great Outdoors Month, recognized every year since 1998 as a reminder to get off the screen and into the world.
Be intentional this summer; don’t let the long daylight hours turn into long work hours. Enjoy the outdoors; the bonds will still be here when you get back. Reach out to The Surety Place to help streamline your bonds to give you back your time.
