Content selected and published by FICS drawn from affiliated Fidelity companies is … Bonds that cover multiple years typically contain an “inflation guard” provision – so the plan’s coverage amount automatically satisfies ERISA each year. Fidelity Investment Grade Bond Fund (MUTF: FBNDX) The issuer has a deep bench and with that in mind, let’s examine some of best Fidelity mutual funds for 401k plans: Fidelity … After that the employee is past an extended probationary period and is no longer considered to be as high-risk. This usually includes those who: process payroll, the plan trustee(s), as well as any other employees that work with the plan on a regular basis. We get of a lot of questions about ERISA fidelity bonds from 401(k) plan sponsors – who must purchase a bond on behalf of their plan. It has a face value of $20,000. What is a Fidelity Bond? However, it can be longer. All qualified retirement plans are subject to Title I of the Employee Retirement Income Security Act [ERISA] of 1974, as amended. No. In the online offering table and statements you receive, bond prices are provided in terms of percentage of face (par) value. While a fidelity bond insures a 401(k) plan against losses due to fraud or dishonesty by persons who handle plan funds or property, fiduciary liability insurance insures plan fiduciaries in case they fail to meet their fiduciary responsibilities. In this year's survey of popular 401 (k) funds, which comes courtesy of financial data firm BrightScope, 17 funds from Fidelity rank among the top 100. Beyond protection, this type of fidelity bond is great for differentiating your business from competitors who aren’t bonded for fidelity. Solo 401(k) plans are not subject to the fidelity bond requirement. As the insured, a 401(k) plan can make a claim on the bond when a loss occurs. What is a Fidelity Bond? The government reviews these filings to confirm sufficient bonding. They do not require a minimum amount of money to invest in them, so you can easily add them in a 401(k) plan or individual retirement account. His keen grasp on 401k plan administration and compliance matters has made Eric a sought after speaker. NOT HAVING COVERAGE IS A RED FLAG. In this case, the principal is the handler of the 401K plan, the obligee is the … Employers that hire high risk individuals or employees who have critical fiduciary responsibilities can find themselves at a crossroads of opportunity and risk. A 401(k) plan official is defined as any person who “handles [plan] funds or other property.” A person is deemed to “handle” plan funds or other property when they meet one or more of the following criteria: hbspt.cta._relativeUrls=true;hbspt.cta.load(227641, '35557063-ebc3-4e48-9035-56a336bbfa05', {}); “Funds or other property” are the assets that a 401(k) plan uses or may use to pay benefits to plan participants or beneficiaries. The Fidelity Bond must provide coverage equal to 10% of the beginning of the year assets/investments up to $500,000 ($1,000,000 if the Plan holds employer securities) with a minimum of $1,000. A Fidelity Bond is a type of Crime insurance that is often required by some states for you to even obtain a business license. Fidelity Investments offers Financial Planning and Advice, Retirement Plans, Wealth Management Services, Trading and Brokerage services, and a wide range of investment products including Mutual Funds, ETFs, Fixed income Bonds and CDs and much more. Contractors. The primary purpose of a Fidelity Bond is to provide protection for you, and even your customers, from acts of fraud committed by your employees. Further, many surety companies make it possible to purchase new bonds or renewals online in minutes. “Blanket” bonds – which cover all your employees – are available for as little as $100 per year. In This Section . A fidelity bond provides coverage for dishonest and/or fraudulent acts of employees in the course of handling plan money or securities. hbspt.cta._relativeUrls=true;hbspt.cta.load(46610, '0493aa81-46d5-46f2-8ea0-2cd84b662766', {}); 9809 Dawson’s Creek BlvdFort Wayne, IN 46825. Kim Moore A bond's price is what investors are willing to pay for an existing bond. And like all aspects of ERISA, there are important exceptions. Failing to report a sufficient bond on the Form 5500 can trigger a plan audit. Fidelity bonds are easy to put in place, are not expensive and can be paid from Plan assets if needed.