Terms like ERISA and fidelity bond may sound complicated (like the kind of insurance policies an insurance broker may try to sell you on at the end of a consultation and not something you absolutely need). But, an ERISA fidelity bond is not reserved for a select few individuals that can afford it (they are much more popular than that). ERISA stands for the Employee Retirement Income Security Act, which was established in 1974 in order to regulate employee benefit plans. The policy protects employees from dishonest action (such as fraud) that stems from those who handle your money. When you put some of your income into a retirement fund you should be able to rest easy at night knowing that that money is safe and an ERISA fidelity bond may be the best way to protect your investment.
What is an ERISA Fidelity Bond
These bonds, as we stated above, are responsible for protecting your retirement savings from being tampered with by your plans’ manager or holder. That way, the thousands of dollars you have put away will be there for you to use when you plan that cruise around the Caribbean or to cover some of your future grand children’s college tuition. Your savings should be for you, and no one else, and a fidelity bond will keep those savings safe.
How much does an ERISA Fidelity Bond cost?
Like most insurance policies, cost is somewhat dependent on the amount of coverage you are looking for (in this case how much money you are seeking to protect). There is one constant however; plans usually need to be greater than or equal to 10 percent of the funds that are being handled by your trustee. Plan limits may range from $1,000 to $500,000 so be sure to meet with an independent insurance agent to make sure you get the best policy for the best price.
Insurance can be a tricky topic to navigate on your own so, if you have any further questions please feel free to give us a call at 212-777-7113. We look forward to hearing from you!