ERISA fidelity bonds.
Every state we write.
Every fiduciary of a 401(k), pension, profit-sharing or health & welfare plan, and every person who handles its money, must be covered by a fidelity bond under ERISA §412 — a federal requirement, the same in every state. The plan is the insured: the bond repays it for fraud or dishonesty by the people who handle its funds. $300 covers the full 3-year term at any limit up to $150,000, which is $100 a year, and the bond issues on payment. Pick your state below for the carrier’s form written for plans sponsored there.
How much does an ERISA bond cost?
$300 for the full 3-year term at any policy limit from $10,000 to $150,000, which works out to $100 a year. Above that the price steps up with each limit, to $450 at $500,000. The limit alone sets the price, and the application has no credit section. Every price below was read from the carrier’s application on September 28, 2026.
| Policy limit | Price, 3-year term | Works out to |
|---|---|---|
| $10,000 to $150,000 | $300 | $100 a year |
| $175,000 | $301 | $100.33 a year |
| $200,000 | $303 | $101 a year |
| $225,000 | $314 | $104.67 a year |
| $250,000 | $326 | $108.67 a year |
| $275,000 | $338 | $112.67 a year |
| $300,000 | $351 | $117 a year |
| $325,000 | $363 | $121 a year |
| $350,000 | $375 | $125 a year |
| $375,000 | $387 | $129 a year |
| $400,000 | $400 | $133.33 a year |
| $425,000 | $411 | $137 a year |
| $450,000 | $423 | $141 a year |
| $475,000 | $435 | $145 a year |
| $500,000 | $450 | $150 a year |
How much coverage does my plan need?
At least 10% of the funds each covered person handled in the prior plan year, with a $1,000 minimum and a $500,000 maximum. The maximum is $1,000,000 for a pooled employer plan or a plan that holds employer securities. A plan that handled $1,200,000 needs a bond of at least $120,000 (29 U.S.C. §1112(a)).
- Bond the law requires
- $100,000
- Policy limit to choose
- $100,000
- Price, 3-year term
- $300
Ten percent of the funds handled, never less than $1,000. The limit is the first one on the carrier’s list at or above that figure.
| Funds handled | Bond required | Limit to choose | Price, 3-year term |
|---|---|---|---|
| $250,000 | $25,000 | $30,000 | $300 |
| $1,000,000 | $100,000 | $100,000 | $300 |
| $2,500,000 | $250,000 | $250,000 | $326 |
| $5,000,000 | $500,000 | $500,000 | $450 |
The amount is fixed at the start of each plan year, so a plan that has grown raises its limit or adds a supplemental bond. A plan does not hold employer securities merely because it invests in a broadly diversified fund that does, provided the fund is independent of the employer and its affiliates. The Secretary of Labor may prescribe more than $500,000 after a hearing.
Who has to be bonded, and who is exempt?
Every fiduciary of the plan and every person who handles its funds or other property (29 U.S.C. §1112(a)). Handling is read broadly (29 CFR §2580.412-6), and the law exempts three kinds of plan or institution.
Handling plan funds means
- Physical contact with cash, checks or similar property
- The power to withdraw from a plan account
- Authority to sign checks or direct disbursements
- The ability to transfer plan property to yourself or someone else
- Supervisory or decision-making responsibility for any of these. General supervision alone does not necessarily count
Exempt from bonding
- Completely unfunded plans that pay benefits only from the general assets of an employer or a union. An insured plan, or one held in trust, is not unfunded
- Registered broker-dealers already bonded under their self-regulatory organization
- Regulated banks, trust companies and insurers with combined capital and surplus above $1,000,000
Is an ERISA bond the same as fiduciary liability insurance?
No. The ERISA fidelity bond insures the plan against loss from fraud or dishonesty by the people who handle its funds. Fiduciary liability insurance covers claims that a fiduciary breached its duties. ERISA requires the bond, not the insurance, and many plans carry both (DOL Field Assistance Bulletin 2008-04, Q2).
| ERISA fidelity bond | Fiduciary liability insurance | |
|---|---|---|
| Required by ERISA | Yes, by §412 | No |
| What it covers | Loss to the plan from fraud or dishonesty by the people who handle its funds | Loss caused by a breach of fiduciary responsibility |
| Minimum amount | 10% of funds handled, from $1,000 to $500,000 | None set by ERISA |
| Deductible | Not allowed | ERISA sets no rule |
| Paid from plan assets | Allowed | Only if the policy lets the insurer recover from a fiduciary who breached |
Is the ERISA bond requirement different from state to state?
The bonding requirement is not. Who must be bonded and for how much is set by federal law and is the same in every state, and ERISA supersedes state laws that relate to a covered plan (29 U.S.C. §1144(a)). State insurance regulation still applies to the bond as an insurance product (§1144(b)(2)(A)), which is why the carrier keeps a separate policy form for most states and a national form for the rest.
More ERISA bond questions
Can the plan pay for the bond?
Yes. The Department of Labor says buying a proper §412 bond does not violate ERISA’s fiduciary rules, so the premium may be paid from plan assets (Field Assistance Bulletin 2008-04, Q11). The employer may pay it instead.
Can an ERISA bond have a deductible?
No. The bond must insure from the first dollar of loss up to the required amount (29 CFR §2580.412-11). The plan must be named as an insured, and the surety must be a corporate surety on the Treasury’s Circular 570 list (Field Assistance Bulletin 2008-04, Q4 and Q31).
How long does an ERISA bond last?
This one runs a 3-year term from its effective date; the carrier sets the term. ERISA allows a term longer than one year, provided the bond is still at least the required amount at the start of every plan year (29 CFR §2580.412-19(a)).
What if the plan holds non-qualifying assets?
A small pension plan that claims the audit waiver with more than 5% of its assets in non-qualifying assets must have the people who handle those assets bonded for at least their full value. It is one of several conditions for the waiver (29 CFR §2520.104-46(b)(1)).
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