Investment Advisor ERISA Bond
Section 412 under ERISA states every fiduciary of an employee benefit plan and every person who handles funds or other property of such a plan shall be “bonded” against fraud or dishonesty. Investment Advisors who control Plan Assets and make investment decisions for ERISA Plans are required to maintain an Investment Advisors ERISA Bond. An Investment Advisors ERISA bond is a specific bond written for investment advisors and is required of all ERISA Fiduciaries under ERISA Section 412.
Investment Advisors are required to have this bond with limits of a percentage of assets under management, up to a maximum of $500,000* for each qualifying plan.
Bonds can be written on an individual basis, where each plan is identified, or written as a blanket bond covering all plans.
The Underwriter will review the following information:
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Sample investment management agreements
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identifying the custodial authority of the funds
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Name of the Plan
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Type of Plans
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Assets under management
Notes:
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ERISA plans should require thirdparty vendors who handle plan funds to provide a copy of a current ERISA bond with the individual plan named as evidence of insurance.
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Most bonds will automatically cover new clients added during the year at no cost
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Investment Advisor ERISA bonds are sometimes also called 3rd Party Fidelity Bonds
* Under the The Pension Protection Act of 2006 bonding limits may rise to $1,000,000
Applications & Forms:
Hartford Non-Custody Investment Advisors Application