ERISA Bond (Employee Retirement Income Security Act) Surety Bonds
ERISA, or Employee Retirement Income Security Act, protects participants and beneficiaries from the dishonest acts of a fiduciary who handles plan assets. ERISA, passed in 1974, requires among other things that every fiduciary of an employee benefit plan who handles plan funds or assets be Bonded by a Surety on the US Treasury List of Acceptable Sureties on Federal Bonds known as the Circular 570.
Coverage amount required must be equal to or greater than 10% of the total plan assets, with a minimum penalty of $1,000 and a maximum penalty of $500,000. The exception is when the investments are part of an ESOP, and in such a case, the maximum Bond penalty is $1,000,000.