Sample eGroup Discussion Threads
Qualified Plans Section Sample Discussion Thread
Sent by Thomas Barth,CLU, ChFC
A Fidelity Bond is required by ERISA (1974). The amount of the bond should equal 10% of Plan assets up to maximum coverage of $500,000 ($5,000,000 in assets). Terminating his Plan by the carrier seems to be extreme. An opportunity to change carriers. Recommend that the Employer obtain a Fidelity Bond. Very inexpensive. Usually less than $100. Also, there is a question on the 5500 asking if the Plan has a Fidelity Bond. You may want to look at the 5500 and see how it was answered.
Have a good day.
Max E. Redlich, CLU, ChFC
An ERISA Bond is often an "add on" to a client's existing P&C coverage. A good P&C agent should bring up the fact that they need this at an annual review, but it is sometimes missed. It is absolutely required and needs to be adjusted upwards each year as plan assets grow. As for the code courtesy of "The 401(k) Answer Book": ERISA sctn. 412(a), 29 U.S.C. sctn. 1112(a) (1974). Good luck.
Brett J. Hoffman, CPA
I knew I could count on this esteemed group. Once again, membership pays off. Thank you.
Sent by Tom Barth