ERISA Bond Reminder from Surety One, Inc. Is Your Plan in Compliance for 2014?

An ERISA Fidelity Bond is an absolute requirement for all defined benefit plans. Don't run afoul of federal code, get fidelity bond coverage immediately.

  • Share on TwitterShare on FacebookShare on Google+Share on LinkedInEmail a friend
"If it has the word 'bond' in it, I'll offer terms regardless of the nature of the obligation." ~ Constantin Poindexter

San Juan, Puerto Rico (PRWEB) January 06, 2014

"If you are a sponsor or manage any type of defined benefit plan, you had better make sure you have one of these," says Constantin Poindexter, President and Chief Underwriter of http://www.SuretyOne.org. Poindexter refers to the fidelity bond required by the Employee Retirement Income Security Act. The purpose of the bond is to provide protection from fraud or other dishonest acts committed by a plan's trustee(s) and fiduciaries. Generally, the bond must be equal to no less than ten percent of the value of all plan assets. The bond is not an option.

Nationally recognized fidelity bond underwriter, Surety One, Inc. offers the ERISA bond required by federal law. The simple application for plans with qualified assets can be completed in a few minutes and submitted to Surety One, Inc. electronically. "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 five line application with a built-in credit card payment form. You fill it out, fax or email it to one of our offices, and its done. You have your bond in hand."

From an underwriter's perspective most ERISA bond applications are low risk and therefore freely written without significant underwriting. Difficulties arise however when a plan contains large amounts of "non-qualifying assets", i.e., assets that are not held or offered by recognized financial institutions. Most insurance carriers decline fidelity bond coverage to these plans. For plan sponsors that find themselves in this predicament, Surety One, Inc. can usually offer terms.

"ERISA bond underwriters look at non-qualifying assets and turn up their noses. I don't understand that. First, the loss figures don't support the decision to decline these applications "across the board". Second, you must remember that the fidelity bond is a dishonesty coverage. Dishonesty is dishonesty no matter what the plan consists of. Plan contents don't turn a 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.", says Poindexter. "I look at ALL outside-of-the-box applications. Qualifying, non-qualifying, employer issued securities, labor unions, multi-employer plans. It doesn't matter to me what the structure or contents are, I'll try to offer terms. Of course, I'll bond that the Atlantic Ocean is going to catch on fire under the right conditions. I'm a bondsman. That's what I'm supposed to do, find a sound way to write a bond from an underwriting perspective and DO it."

Surety One, Inc. operates in all fifty states, Puerto Rico, U.S. Virgin Islands and the Dominican Republic. Licensed since 1993, Surety One, Inc. is one of the top independent ERISA fidelity bond producers in the United States. All ERISA bonds issued by Surety One, Inc. are backed by one of the nation's top five surety insurance carriers, and appear on the U.S. Treasury's circular (T-List) of insurers qualified to secure federal obligations. For more information on ERISA fidelity bonds or any surety bond need, you may contact Surety One, Inc. at (800) 373-2804, visit the convenient ERISA bond-specific website at http://www.ERISA-Bonds.com, or by email at Underwriting@SuretyOne.org. Support is available in english and spanish.


Contact

Follow us on: Contact's Google Plus