ERISA Bond Reminder From Surety One, Inc. - is Your Plan in Compliance for 2020?

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Jan 27, 2020, 13:37 ET

SAN JUAN, Puerto Rico, Jan. 27, 2020 /PRNewswire/ -- "If you are a sponsor or manage any type of retirement plan, you had better make sure you have an ERISA bond in place," says Constantin Poindexter, President and Chief Underwriter of Surety One, Inc. Poindexter refers to the fidelity bond required by the Employee Retirement Income Security Act of 1974. The purpose of the bond is to provide protection from fraud or other dishonest acts committed by a plan's trustee(s). The fidelity bond must be equal to no less than ten percent of the value of all plan assets. The bond is not an option.

Surety bond underwriter, Surety One, Inc. offers the ERISA bond required by federal law. The simple application for plans with qualified assets can be completed, the bond issued and delivered electronically within minutes. "Unless the plan contains a significant amount of non-qualifying assets or some odd investment vehicles, we issue ERISA bonds for our applicants within an hour or two, weekends included," states Poindexter, "We provide a six-line application for these. You fill it out, fax or email it to one of our offices, and your bond is in-hand in minutes."

ERISA fidelity bonds are generally low risk obligations and therefore freely written. Difficulties arise when a plan contains significant balances of "non-qualifying assets", i.e., assets that are issued by recognized financial institutions. Most insurance carriers decline fidelity bond coverage to these plans. Surety One, Inc. offers special programs for such "outside of the box" needs.

Says Poindexter, "ERISA bond underwriters look at non-qualifying assets and turn up their noses. I don't agree. First, the loss figures don't support the decision to decline these applications. Second, fidelity bonds are dishonesty coverages. Dishonesty is dishonesty no matter what the plan consists of. Plan contents don't turn an honest fiduciary into a thief. Third, if you have very significant non-qualifying balances, at some point your plan is probably going to be audited. We look at all applications and offer terms, regardless of the contents. Employer issued securities (ESOPs), labor unions, multi-employer plans are all fine, I'll bond that the Atlantic Ocean is going to catch on fire if I can get my head wrapped around the risk. I'm a bondsman. That's what I do, find a sound way to write a bond that makes sense from an underwriting perspective and write it."

Surety One, Inc. is an international insurance intermediary domiciled in Puerto Rico, licensed in all fifty states, U.S. Virgin Islands and the Dominican Republic. All ERISA fidelity bonds issued by Surety One, Inc. are backed by one of the nation's top ten surety insurance carriers, and appear on the U.S. Treasury's circular (T-List) of insurers qualified to guarantee federal obligations. For more information on ERISA fidelity bonds or to process an online application visit https://ERISA-Bonds.com. For more information call (800) 373-2804 or email [email protected].

SOURCE Surety One, Inc.