The Department of Labor (DOL) has launched an initiative aimed toward the fidelity bond question on the Form 5500. The Form 5500, which must be filed annually, has a question about whether or not the plan is covered by a fidelity bond. Under current Regulations, all persons who handle funds or other property of the plan must be bonded for at least 10% of the amount of funds he or she handles, up to a maximum bonding amount of $500,000 per plan (or $1,000,000 for plans that hold employer securities).
The initiative recently launched by the DOL states that plan sponsors who do not have a bond or are insufficiently bonded could be at risk of receiving a citation. If the 5500 indicates an insufficient bond, the DOL will mail a letter to the plan sponsor stating that within 15 days the sponsor must either (1) file an amended Form 5500 to correct the fidelity bond answer (in the event the question was answered incorrectly) or (2) purchase the correct bond coverage and mail, email or fax proof of coverage to the DOL.
See the DOL website for Field Assistance Bulletin 2008-04 which explains the details of the bonding requirement. http://www.dol.gov/ebsa/regs/fab2008-4.html
The DOL provides a list of approved surety companies from whom fidelity bonds can be purchased at https://www.fiscal.treasury.gov/fsreports/ref/suretyBnd/c570.htm. Just click on Certified Companies at the top right of the page.
In addition, RMS has partnered with Colonial Surety Company to offer fidelity and fiduciary bond coverage for our clients. Colonial Surety Company offers retroactive coverage for plans that have never had a fidelity bond. This convenient coverage allows the plan sponsor to avoid an audit based on their bonding compliance, past and present.
For more information and to request a quote, you can visit our website at http://www.consultrms.com/Resources/46/FIDELITY-FIDUCIARY-BONDING/84/Fidelity-Fiduciary-Bonding.