ERISA fidelity bonds sized to the DOL 10% rule
Every fiduciary who handles benefit-plan funds needs an ERISA Section 412 fidelity bond. We size it correctly, renew it before the DOL sees a lapse, and issue it through an A-rated carrier.
The federal fidelity requirement for benefit-plan fiduciaries
Section 412 of the Employee Retirement Income Security Act of 1974 (ERISA) requires that every fiduciary and every person who handles funds or other property of an employee-benefit plan be bonded. The bond protects plan participants against loss caused by acts of fraud or dishonesty by those individuals — it is the federal government's answer to "who makes the plan whole if a trustee steals?"
The bond is not paid for by the plan participants; it's paid for by the plan sponsor or the plan itself, and the coverage runs to the plan. Filing the bond is a compliance box that appears every year on Form 5500 — and running the plan without a proper ERISA bond exposes the fiduciary personally, on top of any DOL enforcement action.
How to size an ERISA bond
ERISA sets the bond amount at not less than 10% of the funds handled in the previous plan year, subject to a $1,000 minimum and — for most plans — a $500,000 maximum ($1,000,000 if the plan holds employer securities). "Funds handled" generally means the plan's total assets attributable to the individual fiduciary at the beginning of the reporting year, plus any contributions received during the year.
The right way to work it: take the highest asset value the plan touched last year, multiply by 10%, round up to the nearest whole-thousand rate tier, and file the bond at that number. If plan assets grow mid-year and cross the 10%-coverage threshold, the bond needs to be increased — which is why our renewals default to an inflation-guard rider that adjusts the coverage each year without a re-underwrite.
ERISA bond programs we write
Standard ERISA fidelity
The bond every qualified plan needs — 401(k), profit-sharing, pension, health & welfare, cafeteria and multiple-employer plans. Sized at 10% of assets, up to the federal maximum. Instant issue on clean applications.
Non-qualified plan fidelity
Executive deferred-compensation plans and other non-qualified programs that still handle funds. Not always ERISA-mandated, but written on the same fidelity form so the fiduciary has coverage.
Inflation-guard renewals
Coverage that automatically adjusts up as the plan grows, so a mid-year asset spike never leaves you under the 10% requirement at Form 5500 time.
Employer-securities plans
Plans holding company stock trip the higher $1,000,000 statutory maximum. We write bonds up to that ceiling and coordinate with the plan's TPA on the correct coverage amount.
Multi-year term policies
Three-year term bonds where the plan sponsor prefers to lock coverage and premium rather than renew annually. Same DOL compliance, less admin.
Named-fiduciary endorsements
Endorsements that name individual trustees, TPAs and directed-trustee firms — so the coverage reaches every person who handles plan funds, not just the plan sponsor.
Frequently asked questions
Good to KnowThe questions plan sponsors and TPAs bring us most often.
Every fiduciary who handles plan funds — plan trustees, plan administrators, officers and employees with authority to disburse or receive contributions. TPAs and directed trustees are typically covered by their own bond, but a named-fiduciary endorsement on the plan's bond is common and cheap.
The Form 5500 asks whether the plan is bonded. Answering "no" flags the plan for DOL review and creates personal exposure for the fiduciary if a participant loss ever occurs. In practical terms: get the bond in force before you file.
Standard ERISA bonds are priced as a low annual premium — $100–$300 is typical at $10k–$100k coverage; $300–$600 at $500k coverage. Multi-year term bonds discount the annual rate; inflation-guard riders are pennies on the dollar.
An inflation-guard rider adjusts the coverage automatically. Without one, you can request a mid-term increase — most carriers process it same-day and endorse the bond retroactively to the ledger date.
Send us the plan asset total — we'll size the bond
Send the plan name, prior-year total assets and whether employer securities are held. That's enough to quote the bond within a business day.
- 201-661-2381 — Anthony Spina, direct line
- aspina@acsbonding.com
- 1200 MacArthur Blvd., Suite 302A, Mahwah, NJ 07430
Request received!
Anthony will be in touch shortly. For an urgent filing, call 201-661-2381.