{"id":42771,"date":"2025-02-26T02:03:41","date_gmt":"2025-02-26T02:03:41","guid":{"rendered":"https:\/\/gillespieinsuranceservices.com\/?page_id=42771"},"modified":"2025-05-29T15:38:38","modified_gmt":"2025-05-29T15:38:38","slug":"erisa","status":"publish","type":"page","link":"https:\/\/finfrockweb.com\/gis\/erisa\/","title":{"rendered":"ERISA Bonds"},"content":{"rendered":"\t\t
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ERISA<\/span> Bonds<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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  1. Home<\/a><\/li>
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  3. ERISA Bonds<\/li><\/ol><\/div>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t
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    At Gillespie Insurance Services, we believe that simple things should be simple<\/strong>. While bonds themselves are not always simple, buying one should be<\/em>. Our mission is to help you get the bond you need without the friction.<\/p>

    The ERISA Bond is a specific type of bond you have to get if you sponsor a retirement plan for your company.<\/p>

    If you are a business owner and you have sponsored a retirement plan like a SEP IRA or 401k for your company, you have to get an ERISA bond.<\/p>

    If you\u2019re familiar with ERISA bonds, know what you need, and are ready to buy, just click below to get bonded in about five minutes.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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    \n\t\t\t\t\t\n\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\tGet Your ERISA Bond Now<\/span>\n\t\t\t\t\t<\/span>\n\t\t\t\t\t<\/a>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    If this is your first time dealing with an ERISA bond, you might have a few questions, like: What is an ERISA bond? Why do I need one? How much do I need to be bonded for? How much does it cost? How do I get one?<\/p>

    Wherever you\u2019re at, we\u2019re here to answer all your questions and get you bonded if you need to be.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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    What is an ERISA Bond?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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    An ERISA bond is a type of fidelity bond that pays for financial losses resulting fraudulent or dishonest acts performed by the people that handle your company\u2019s retirement plan funds. Should a claim occur, the plan is reimbursed for the fraudulent loss of plan funds.<\/p>

    Here\u2019s is a short version showing how a claim scenario could occur:<\/p>

    1. You, the business owner, hire a person to transfer funds from your company\u2019s operating account to its 401k account each pay period. This person could be an independent contractor, vendor, or your own employee.<\/li>
    2. Each bi-weekly pay period, the person sends you a statement showing that $2,000 was transferred from the company\u2019s account to the 401k. But in reality, the guy deposited only $1,500 into the company\u2019s 401k and transferred $500 into his own account.<\/li>
    3. A year into it, when it comes to tax time, your CPA notices a $13,000 discrepancy between the amount pulled from the company account vs the amount deposited to your 401k.<\/li>
    4. A few lawyers, terminations, and apology letters later, you file a claim on your ERISA bond for $13,000.<\/li>
    5. The surety deposits $13,000 into your 401k account. The claim is closed.<\/li><\/ol>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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      Why Do I Need One?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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      As is the case at least half the time with insurance, you have it because the government says so. The mandate for ERISA bonds came in 1974, as part of the Employee Retirement Income Security Act.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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      How Much Do I Need to Be Bonded For?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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      Generally \u2013 with a few exceptions that are rare enough for me not to mention here \u2013 you need an amount equal to at least 10% of the total asset value of your retirement plan. So, for example, if you have a company sponsored 401k, and the total combined value of all your employees\u2019, former employees that still have their 401k with you, and your own account equals $1,000,000, you would need to have an ERISA bond with a limit of $100,000.<\/p>

      ERSIA bonds cap at $500,000, so the maximum bond limit you would ever need to have is $500,000 regardless of how big your retirement account is. So if your company\u2019s 401k grew to $10,000,000, you still only have to be bonded for $500,000.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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      How Much Do They Cost?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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      ERISA bonds are based on a rate that gets multiplied by the limit. The surety will determine the appropriate rate for your business based on your company\u2019s characteristics (this is called underwriting). Rates can range from a fraction of a percent to over 1%.<\/p>

      Generally, you can expect 1% or less rate if the following applies to your company:<\/p>