Map who can move or control plan assets

The Department of Labor's guide uses a broad concept of handling. Signing checks, directing disbursements or having power to transfer plan funds can create a bonding obligation even when a person never holds cash.

Review service providers as well as employees and trustees. The guide says a third-party administrator or investment adviser must be bonded if the provider or its employees handle the plan's funds or other property, unless an exemption applies.

Calculate the amount separately from the term

The federal guide generally calls for each person to be bonded for at least 10% of funds handled in the preceding year, with a $1,000 minimum. It describes a usual required maximum of $500,000, increasing to $1,000,000 for plans holding employer securities.

Those figures apply per plan and are not a universal menu of amounts on this page. The guide notes that bonds covering more than one plan can need more than $500,000. Have the plan's adviser assess the required amount and any exemptions for your arrangement.

Compare the 12-month and 36-month choices, and evaluate appropriate protection as plan circumstances change.

Check the insured plan and the kind of protection

The Department of Labor says the plan must be named or otherwise specifically identified as an insured party. It also says deductibles or similar features are prohibited for losses within the amount a person is required to be bonded.

Fiduciary liability insurance addresses breaches of fiduciary responsibilities. The guide expressly says that it does not satisfy ERISA's fidelity bonding requirement. An employer's general employee dishonesty policy also needs a form-level check before it can be relied on for this purpose.

Choose the actual term you need

Select the one-year or three-year option that matches your intended protection period, then select Purchase Now. RLI's application opens in a new tab. Confirm the plan identity, handling activities and required amount there; neither option lists a fixed amount on this page.

The federal guide requires an eligible surety arrangement and discusses exemptions for certain plans and institutions. Check those points with the plan's adviser and provider. After issuance, review the insured plan, amount and effective dates and keep the document with the plan's records.