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Bonding exceptions


Guest EBC

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Posted

Are there any exceptions for a profit sharing plan not needing a bond?

Posted

I respectfully disagree with the above cite.

I believe the answer is most easily found in reading ERISA section 412(a) which discusses which plan (as opposed to which insurer) is exempt from the bond requirement.

Short answer, if the profit sharing plan has assets and those assets are not trusteed by an insurance company or a bank, or if the trustees of the plan are individuals who are not under the supervision or examination by Federal or State authority, it must be bonded. Assuming, of course, that there are common law employees or non-owners employed and participating in the plan.

Kristina

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