ERISA Bonds

Protect retirement plans and meet legal requirements online in minutes.

What Is an ERISA Bond?

ERISA stands for Employee Retirement Income Security Act of 1974. An ERISA fidelity bond is a safeguard for employee retirement plans. It protects employee savings from losses due to fraud or theft by the people managing the funds.

By law, the bond must cover at least 10% of the funds being handled, with a minimum of $10,000 and a maximum of $500,000 per plan (or $1,000,000 for plans holding employer securities).

It also comes with a feature called an inflation guard. This automatically increases the coverage if the plan’s value grows without raising the bond cost.

ERISA Bond vs. Fidelity Bond

While both bonds protect against dishonesty, an ERISA bond is a subtype of fidelity bonds. Fidelity bonds cover theft or fraud in general, while ERISA bonds are specific to employee retirement plans.

ERISA Bond	Fidelity Bond
Protects employee benefit plans from theft or fraud by plan managers.	Protects businesses from employee dishonesty, like theft.
Required by law with set coverage amounts.	Covers and reimburses losses for its clients.
Includes inflation guard to adjust for increases in plan assets.	Works like insurance but has no deductibles and requires repayment to the bond company if a claim is paid out.

Simply put, an ERISA bond protects employee retirement savings, while a fidelity bond protects businesses and clients from employee dishonesty.

What Does an ERISA Bond Cover?

If someone mishandles your employee retirement funds, ERISA bond coverage is there to protect the plan (and your employees). This applies to individuals like fiduciaries, plan handlers, and service providers who have control over plan assets.

If a fiduciary steals from the plan

Our bond partner can cover the stolen money, securing your employees’ savings.

If a trustee embezzles contributions

Our bond partner can reimburse the missing contributions, protecting your employees’ hard-earned money.

If a plan handler falsifies records to cover up theft

Our bond partner can step in to make sure the funds are replaced, keeping the retirement plan intact and secure.

Who Needs ERISA Bond Insurance?

If your business manages employee retirement plans, you should consider an ERISA bond. It’s essential for anyone handling plan assets, including plan administrators, investment managers, payroll staff, and third-party service providers.

Companies with employee retirement plans

Protects your business if someone misuses or steals retirement plan funds.

Pension plan trustees or fiduciaries

Covers theft or fraud by those managing retirement funds.

Financial advisors or managers

Ensures protection if client funds are mishandled or stolen.

Employee benefit plan administrators

Safeguards against fraud or mismanagement of employee benefit plans.

How Much Do ERISA Fidelity Bonds Cost?

The cost of an ERISA bond depends on a few key factors in addition to compliance with U.S. Department of Labor regulations. Insurance Canopy’s ERISA bond premiums start at $100 for a policy limit of $10,000, or $452 for a policy limit of $500,000, both for a 3-year term.

Bond amount
- The bond must cover at least 10% of the total plan assets managed in the previous year. The higher the bond amount, the higher the premium.
- Minimum Coverage: $1,000
- Maximum Coverage: $500,000 per plan (or $1,000,000 for plans holding employer securities)
Length of coverage
- ERISA bonds are typically priced for a 3-year term, with premiums based on the coverage amount selected.

Example premiums

For a retirement plan holding $200,000 in assets:
- Coverage required = $20,000 → Premium starts at around $120
For a retirement plan holding $8,000,000 in assets:
Coverage is capped at $500,000 → Premium starts at $452

Key notes

Plans with employer securities require higher coverage, up to $1,000,000.
Some bonds include an inflation guard to automatically adjust coverage as the plan’s value grows.

How to Get ERISA Bond Coverage

Applying for an ERISA bond through Insurance Canopy is quick and hassle-free.

Select your coverage: Pick the bond amount based on the funds you manage to get $10,000 to $500,000 in coverage
Make your payment: Complete your payment securely online
Receive your bond: Once payment is made, you’ll receive your ERISA bond confirmation instantly

Questions About ERISA Bonds

Is an ERISA bond the same as insurance?

No, ERISA bonds are not insurance. They protect retirement funds from theft or fraud by plan managers while insurance covers things like third-party injuries, property damage, and other liability risks.

Is an ERISA bond the same as a surety bond?

While all ERISA bonds are surety bonds, not all surety bonds are ERISA bonds. Surety bonds are agreements where one party guarantees the obligations of another. ERISA bonds are a type of surety bond that specifically covers losses from fraudulent activities by companies managing employee retirement plans.

What is the difference between an ERISA bond and a crime policy?

An ERISA bond covers theft or fraud of retirement plan funds, while a crime policy covers a wider range of crimes, such as theft or burglary within a business. ERISA bonds only apply to retirement plans, while crime policies apply to general business operations.

Is ERISA bond the same as employee dishonesty?

No, an ERISA bond is specifically for protecting retirement funds, while employee dishonesty bonds are designed to cover claims of employee theft or fraud in general, not just retirement plans.

What is the penalty for not having an ERISA bond?

If you are required to have an ERISA bond and fail to obtain one, you could face penalties from the Department of Labor (DOL). This means possibly facing fines and being disqualified from receiving tax benefits for your retirement plan.