What Is an Indiana ERISA Stand-Alone Bond?

An Indiana ERISA Stand-Alone Bond is a fidelity bond required under ERISA Section 412 for individuals handling funds or assets of an employee benefit plan. It protects the plan and its participants from losses caused by fraud, dishonesty, or mismanagement by plan fiduciaries.

Key Features of the ERISA Bond:

✅ Required by federal law for most employee benefit plans.
✅ Protects plan participants from financial losses due to fraud or dishonesty.
✅ Covers individuals with access to plan assets (fiduciaries and those handling funds).
✅ Must be at least 10% of plan assets, with a minimum bond amount of $1,000 and a maximum of $500,000 (or $1,000,000 for plans holding employer securities).

Unlike other types of surety bonds, ERISA bonds do not protect the fiduciary—they protect the beneficiaries of the plan.

Who Needs an ERISA Stand-Alone Bond?

You need an ERISA bond if you are a fiduciary or have responsibilities that involve handling plan assets. This includes:

• Plan administrators

• Trustees

• Officers and employees who have access to funds

• Anyone with authority over the plan’s funds or property

Common Employee Benefit Plans That Require an ERISA Bond:

• 401(k) plans

• Pension plans

• Health and welfare plans

• Profit-sharing plans

• Employee stock ownership plans (ESOPs)

If your plan does not hold assets (e.g., fully insured health plans), you may not need an ERISA bond. However, most plans that hold funds or assets are required to have this bond in place.

How Much Does an Indiana ERISA Bond Cost?

The cost of an Indiana ERISA Stand-Alone Bond depends on:

• The total value of plan assets – The bond must cover at least 10% of assets with a minimum of $1,000 and a maximum of $500,000 (or $1,000,000 for plans holding employer securities).

• Bond coverage amount – The higher the bond amount, the higher the premium.

• Risk factors – The financial history of the plan and its fiduciaries may affect the cost.

Estimated Annual Bond Premiums:

• $10,000 bond → Around $100 - $150 per year

• $100,000 bond → Around $250 - $500 per year

• $500,000 bond → Around $1,000 - $2,500 per year

In my dealings with plan fiduciaries, I’ve seen that most ERISA bonds are affordable and can be obtained quickly with the right surety provider.

How to Get an Indiana ERISA Stand-Alone Bond

Securing an ERISA bond is a simple process when working with a knowledgeable surety provider. Here’s what you need to do:

1️⃣ Determine your required bond amount – This is usually 10% of plan assets but may vary based on the type of plan.
2️⃣ Complete an application – Provide details about the plan, fiduciaries, and required bond amount.
3️⃣ Receive a quote – Once approved, you’ll receive a bond price based on your coverage needs.
4️⃣ Pay for the bond and receive your certificate – This document is proof of compliance with ERISA regulations.
5️⃣ Renew annually – ERISA bonds must be maintained as long as the plan is active.