What Is a California ERISA Bond?
An ERISA bond is a type of fidelity bond used to insure people who participate in employee benefit plans from acts of fraud or dishonesty. They are required for all employees with administrative access to a defined benefit plan, pension fund or 401(k) plan.
California ERISA fidelity bonds ensure that individuals are given plan information. It also sets participation, vesting and benefits accrual standards and creates grievance and appeal processes.
SuretyBonds.com is legally licensed to issue ERISA surety bonds in all 50 states.
What Is the Employee Retirement Income Security Act?
The Employee Retirement Income Security Act (ERISA) became federal law in 1974 to protect individuals who contribute to 401(k) plans in private industries. Enforced by the U.S. Department of Labor, ERISA bonds guarantee money is available if the fiduciary mishandles retirement account funds.
What Is a Fiduciary?
Fiduciaries are individuals who oversee and manage employee benefit plans. They are expected to work in their clients’ best interests. The California fiduciary purchases the ERISA bond(s) for beneficiaries who require the bond. A 401(k) plan is the principal (insured party) and the surety company is the insurer.
How Much Does an ERISA Bond Cost in California?
California ERISA bonds typically cost $105–$475 for the three-year term, depending on the coverage value. Bond coverage amounts of $10,000 to $500,000 are available for instant purchase at a set price. However, ERISA bonds for coverage greater than $500,000 are subject to underwriting.
Select the bond you need below to purchase or apply now to receive a quote within one business day.
How Do I Get a California ERISA Fidelity Bond?
You can easily purchase your California ERISA bond online with SuretyBonds.com. Have the following information ready to begin the bonding process:
- Business name (plan sponsor)
- Name of the plan (name of the 401(k) plan)
- Address and contact information
- Financial documentation (for bond coverage exceeding $500,000)
If your required bond coverage is $500,000 or less, select your bond amount and buy online now. If your bond amount exceeds $500,000, submit an quick request form.
Note: Applicants with a criminal history will not be approved for ERISA bonding.
What Are the California ERISA Bond Requirements for 401(k) Plans?
Each 401(k) plan fiduciary must be bonded in an amount equal to at least 10% of the amount of funds they handled in the previous year.
If the plan includes non-qualifying assets (items not held by any financial institution, including real estate and collectibles), the bond amount is either 10% of the plan assets being handled or the value of the non-qualifying assets — whichever is greater.
If you obtain a plan with more than 5% in non-qualifying assets and want a bigger bond, there are two steps to follow:
- Choose a bond with a value equal to the non-qualifying asset.
- Get a yearly bond audit by a certified public accountant.
Note: A fiduciary’s bond coverage amount must be updated as a plan’s assets increase or decrease. If your plan’s assets have recently changed in value, give us a call to determine if your ERISA bond requirements have also changed.
How Quickly Can I Get My Bond?
You can get an ERISA fidelity bond within hours with SuretyBonds.com. We issue most ERISA bonds via email delivery on the same day as purchase.
If you need more than $500,000 of coverage, you’ll have to provide a bit more information that will be subject to an underwriter’s review.