What are ERISA Bonds? (Employee Retirement Income Security Act) - YouTube

Here’s the Ultimate Guide to ERISA Bonds

Here’s a 2-minute video guide highlighting  the basics and the process of securing  

an ERISA Bond. Have an insight into the purpose of  an ERISA bond and know the cost of getting bonded.  

Find out how to easily obtain this  type of surety bond from our company.

Before anything else, it is important to note  that the Employee Retirement Income Security Act  

(ERISA) created ERISA bonds. ERISA was  responsible for establishing a regulatory  

structure for employer-sponsored  retirement plans and is one of the  

most important pieces of legislation for  retirement planning and administration.

What is an ERISA Bond?

In its simplest sense, an ERISA bond  is a tool for protecting beneficiaries  

that emerged from ERISA. Employees that  engage in retirement employee benefit programs  

are protected by this bond. It is often required  from businesses that administer retirement plans  

in order to avoid fraud and mismanagement.

The bond serves as a safety financial  net that was formed to ensure that the  

person who is handling the plan will be held  accountable in case of abuse or dishonesty.

Given the number of retirement plans, which  of these are covered by the ERISA Bond?

1.) DEFINED-BENEFIT PLAN This is also known as a traditional  

pension plan that is funded by the employer which  pays the employee a certain sum when they retire. 

2.) DEFINED-CONTRIBUTION PLAN A defined-contribution plan  

is the opposite of a defined-benefit plan. It  does not provide a set amount to the employee  

upon retirement. The amount will change depending  on the investment's value. Aside from that, both  

the employer and the employee contribute to it. 3.) SIMPLIFIED EMPLOYEE RETIREMENT PLANS (SEP) 

Employers can contribute to their employees'  retirement plans easily with this type of plan.  

The contributions are just sent to  the employees' Individual Retirement  

Accounts (IRAs). 4.) 401(k) PLAN 

This is a type of a defined-contribution plan  along with 403(b) plans. With this type of plan,  

the employers can contribute the same amount that  the employees can choose to put in their accounts.  

The investments in this particular plan  will only be taxed once the employee  

decides to withdraw the money. 5.) PROFIT-SHARING PLANS 

This is also known as Stock Bonus Plans  where employers can choose how much yearly  

contribution they can make based on the  business’s profits. The contribution is  

provided either through cash or stock options. 6.) EMPLOYEE STOCK OWNERSHIP PLANS (ESOP) 

An ESOP is a type of defined-contribution plan  and is part of an employee’s remuneration package.  

In this plan, the employer allows the employee  to become shareholders of the company they are  

working for and the employer will put the  shares in a trust fund that they’ve created. 

What is the cost of an ERISA Bond? The cost of the ERISA bond is a small  

percentage of its overall value and is based on  the bond amount. Typically, this is a 3-year bond,  

and the costs are surprisingly low. If you need to secure an ERISA Bond, we can  

help you get bonded in all 50 states. ERISA Bonds  are easy to obtain and we can usually finalize the  

bond on the same day or the next day. Get the FREE bond application  

from us by visiting our website at  https://suretybondauthority.com/erisa-bonds/!  

You may also give us a call at 800-333-7800 and  one of our surety bond experts can assist you.