The Employee Retirement Income Security Act passed by Congress in 1974 (ERISA), requires that most qualified retirement plans maintain an ERISA Fidelity Bond to protect the assets in the plan from fraud or dishonesty by the plan fiduciaries (such as the Trustee and Administrator) as well as other persons who handle plan assets or funds. The plan must be bonded for at least 10% of the value of the plan assets.
An ERISA Fidelity Bond is different from an employee dishonesty insurance policy or rider your company may have, as well as fiduciary liability insurance.
We have partnered with Colonial Surety Company who is guaranteeing the best pricing to our clients.
To make it easier, we’ve partnered with Colonial Surety Company, a nationally trusted provider of ERISA-compliant insurance products, to offer our clients excellent pricing and fast, secure access to the coverage you need.
A fidelity bond is required under ERISA for nearly every retirement plan. It protects the plan from losses caused by fraud or dishonesty by individuals who handle plan assets. Without one, the plan is not in compliance with federal regulations.
While not required, this coverage protects individual fiduciaries – such as business owners trustees, or plan committee members – from personal financial liability if accused of mismanaging plan assets or breaching fiduciary duties under ERISA.
As data breaches and ransomware threats grow, this optional coverage helps protect your business from the financial and reputational damage of cyberattacks involving participant data or plan operations. Even is you use a recordkeeper, as a plan sponsor you still hold and transmit sensitive information (names, Social Security numbers, account balances, payroll data, etc.) to services providers via:
If data is intercepted, misdirected, or breached while in your possession or during transmission, you could be held liable.
| Coverage Type | ERISA Fidelity Bond (Required) | Fiduciary Liability Insurance | Cyber Liability Insurance |
|---|---|---|---|
| Purpose | Protects the retirement plan from theft, fraud, or dishonesty by anyone who handles plan assets. | Protects individual fiduciaries from personal financial liability for breaches of fiduciary duties under ERISA. | Protects the organization from cyber events that threaten participant data or cause financial harm. |
| Coverage Highlights |
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| Who It Protects | The retirement plan itself | Named fiduciaries, trustees, officers, and committee members | The employer/plan sponsor, executives, and employees |
| Requirement Status | Mandatory under ERISA for most plans | Optional but critical for fiduciaries | $50,000 of Cyber Liability Insurance is included free when a 1-3 year ERISA Fidelity Bond and Fiduciary Liability Insurance Bond is Purchased. |
We’ve made it easy to protect your plan and stay compliant. Request a quote or purchase directly from Colonial Surety Company with the link below:
Existing clients, for questions or one-on-one help, please contact your dedicated Analyst.
Not a client, but need help? Please contact JP Perryman at jperryman@benefits2llc.com or 208.955.1574.
Our offices will be closed December 24-26 and January 1.
We wish you and yours a warm and safe holiday season, Benefits² Administrators
