ERISA Fidelity Bond, Is Your Plan in Compliance for 2021?

An Insurance News Net, Inc. Feature

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Dec 14, 2020, 08:35 ET

SAN JUAN, Puerto Rico, Dec. 14, 2020 /PRNewswire/ -- Pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), every regulated retirement plan must be covered by an ERISA fidelity bond. The purpose of the bond is to protect plan assets from fraud or other dishonest acts committed by the plan's sponsor and trustee(s). Carrying an ERISA bond is mandatory, carrying civil and criminal sanctions for willful failure to procure one.

Surety One, Inc. offers the ERISA fidelity bond required by federal law. "If you are a sponsor or manage any type of retirement plan, you had better make sure you have this fidelity bond in place," says Constantin Poindexter, President of Surety One, Inc. "There is a lot of non-compliance with this requirement. If a loss is reported to the Department of Labor an no fidelity bond covers the plan, the penalties can be severe. It really makes no sense not to purchase one. They are the least expensive bonds in the industry."

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 immediately," states Poindexter. "We provide a six-line application. 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. Difficulties arise only where a plan contains significant balances of non-qualified assets, i.e., assets not issued by financial institutions. Retro-dating of bonds is also problematic however Surety One, Inc. offers special programs for "outside of the box" requirements. Says Poindexter, "Surety companies generally decline bonding those plans with significant non-qualifying asset balances. That really doesn't make a lot of sense. The loss history doesn't support declination. A dishonest act with regards to a plan is a dishonest act, no matter what the plan contains. A diversity of assets doesn't turn a trustee into a thief. We offer terms for plans made up of employer issued securities (ESOPs), labor unions, multi-employer structures and non-qualified assets. If the application makes sense, we'll write it."

Surety One, Inc. is an international insurance intermediary domiciled in Puerto Rico, operating throughout the United States and U.S. Virgin Islands. All ERISA fidelity bonds issued by Surety One, Inc. are supported by one the nation's top surety insurance carriers, active 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.