401 k plan fidelity bond requirements

If you're not sure what your assets will be in the future because of lack of prior year data (common for companies setting up their very first 401(k) plans) we recommend putting 100,000 and buying the 5-year plan, which typically covers any future increases.
The minimum required coverage is the lesser of 1,000 or 10 of plan assets.
Exception #1: For plans that invest in the stock or other securities of the company sponsoring the plan (think esop the maximum bond amount is increased to 1 million.2550.412-1 and.F.R.The amount of the bond must be reported on the financial schedule to Form 5500 (Schedule H for large plans and Schedule I for small plans).Examples of non-erisa plans include single-participant plans (such as individual 401(k) plans plans sponsored by most churches or church-controlled entities, plans sponsored by governmental entities and certain 403(b) plans that qualify for an erisa exemption.However, higher limits can be purchased.A person handles funds when his or her duties or activities establish a risk that the funds could be lost if that person were to commit a fraudulent or dishonest act.Arrange for an annual full-scope audit, where the CPA physically confirms the existence of the assets at the start and end of the Plan year.In most instances, the maximum bond amount that can be required under erisa with respect to any one plan official is 500,000 per plan.Erisa section 412 and related regulations (29.F.R.Holding decision-making responsibility for related activities.Anyone who "handles funds or other property" of an employee benefit plan is required to be bonded (unless covered by an erisa exemption).The erisa bond is required to protect the participants and beneficiaries from dishonest acts of a fiduciary who handles the plan assets.There are three employees who have access and handle (approve, distribute, etc.) plan funds.Erisas bonding requirements are intended to protect employee benefit plans from risk of loss due to fraud or dishonesty on the part of persons who handle plan funds or other property.For further detail on the specific bond terms and provisions, please see the related section of the Department of Labors website.This seems to be a standard part of due diligence into a company's finances and liability.These bonds are intended to protect the plans from dishonesty and fraud committed by individuals who are associated with them.For example: four nights with the devil pdf A company plan has funds that total 1 million.Bonds must be obtained from a provider sureties approved by the.Who needs to be bonded?The main thing to understand is the rationale and importance behind securing an erisa bond.
What are Fidelity Bonds?