When your company sponsors a corporate retirement plan, the Internal Revenue Service (IRS) and Department of Labor (DOL) may require the company to maintain an ERISA Bond (aka Fidelity Bond). In the simplest terms an ERISA Bond is an insurance policy for your plan participants.
Retirement plan assets are then identified as holding "qualifying" or "non-qualifying" assets.
- Qualifying Assets: Assets held by a financial institution, such as a bank, insurance company, or broker/dealer and may include stock, bonds, and/or but not limited to mutual funds.
- Note: Qualified Employer Securities (QES, aka ROBS) is considered a qualifying asset.
- Non-qualifying Assets: Assets not held by a bank or financial institution and may include limited partnerships, artwork, collectibles, mortgages, unsecured loans, private receivables, and/or but not limited to real-estate. In short, assets not held in trust.
Retirement Plans containing non-qualifying assets must be covered by an ERISA Fidelity bond that meets the requirements of section 412 of ERISA. Note that there is an important difference in the bond amount required under the Federal Code. Instead of the standard ten percent (10%) of asset value fidelity bond requirement that exists for qualifying assets, the bond must be equal to one hundred percent (100%) of the value the non-qualifying plan assets. That portion of a plan must follow the “1:1” formula.
Article ID: 176, Created: 4/20/2026 at 1:54 PM, Modified: 4/20/2026 at 1:54 PM