The bond your plan is required to carry.
ERISA section 412 requires the people who handle a retirement plan’s money to be bonded. I size the bond to your plan’s assets each year and place it with a surety on the Treasury’s approved list.
By Sam Alishahi · CA Insurance License #4348151 · Reviewed October 2026 · How this page is researched
It protects the plan, not the people running it
Section 412 of ERISA requires every fiduciary of an employee benefit plan, and every person who handles its funds or other property, to be bonded. The bond insures the plan against losses from fraud or dishonesty by those people. It has to cover from the first dollar of loss, with no deductible, and the plan must be named or identified on the bond so the plan itself can make a claim.
It isn’t fiduciary liability insurance. The Department of Labor explains that the bond insures the plan against fraud or dishonesty, while fiduciary liability insurance generally covers fiduciaries for breaches of their duties. A plan sponsor can need both. The bond amount is fixed at the start of each plan year, so I recheck it against the plan’s assets at every renewal.
- 10% of funds handledFixed at the start of each plan year, based on the prior year’s amount handled.
- $1,000 minimumPer plan, however small the plan is.
- $500,000 maximum$1,000,000 for plans holding employer securities and for pooled employer plans.
- No deductibleThe bond must insure the plan from the first dollar of loss.
What underwriters will ask
Having these ready means I can go to market on the first call. The quote form asks for the same things, and anything you don’t know yet can wait.
- Plan: name, type and plan year.
- Assets: plan assets at the start of the plan year.
- People: trustees, officers, staff and service providers who handle plan money.
- Employer securities: whether the plan holds company stock.
- Unusual assets: real estate or anything held outside a bank, insurance company or brokerage.
- Current bond: the bond form, amount and named plans.
ERISA bonds, answered
How big does my plan’s bond need to be?
At least 10% of the funds handled, fixed at the beginning of the plan year, with a $1,000 minimum. The required amount tops out at $500,000 per plan, or $1,000,000 for plans holding employer securities and for pooled employer plans. A plan with $800,000 in assets, for example, needs at least $80,000.
Is an ERISA bond the same as fiduciary liability insurance?
No. The bond protects the plan against fraud or dishonesty by people who handle its money. Fiduciary liability insurance generally protects the fiduciaries when they’re accused of breaching their duties. One doesn’t replace the other.
Who has to be bonded?
Anyone who handles plan funds or other property. Fiduciaries and service providers need to be bonded only if they handle plan assets. Completely unfunded plans paid from an employer’s general assets are exempt, but insured plan arrangements aren’t treated as unfunded, and certain banks, insurance companies and registered broker-dealers have their own exemptions.
Can the bond have a deductible?
No. ERISA requires the bond to insure the plan from the first dollar of loss. The plan must also have one year after a bond ends to discover losses that happened while it was in force.
What does the bond have to do with the small plan audit waiver?
A pension plan with fewer than 100 participants can skip the independent audit if, among other conditions, at least 95% of its assets are qualifying plan assets, or anyone who handles the non-qualifying assets is bonded for at least their full value. That enhanced bond is in addition to the usual 10% rule.
Do you offer ERISA fidelity bond outside California?
Yes. Clients across the country send the same quote form. Sam Alishahi is licensed in 48 states and Washington, DC and places policies there directly. In Florida and Washington, where Sam's licenses are still being issued, a partner agency in your state helps in the meantime. The shopping across carriers works the same way. Rules, minimums and markets differ by state — see insurance requirements by state.
Tell me about the plan. I’ll size the bond.
The plan’s name, its assets and who handles the money are enough to start.
Alishahi Insurance · Saman Alishahi, independent insurance broker, California License #4348151. General information, not a quote or a promise of coverage; coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.
Tell me how to reach you. I’ll take it from there.
Takes about 30 seconds. Your application link comes by email right away, and you get an update at every step until your quotes are ready.
(877) 711-4545Answered 24/7 · CA License #4348151
Get a reminder before your renewal.
Tell me when your policy renews and I’ll email you about six weeks before, when it’s worth comparing. One email, no calls.