Restricted HCE/Bonding Solution

[JAY21]

I've always understood that a restricted HCE in an under funded DB plan could obtain/post a bond to cover his benefit in the event of a "pre-mature" plan termination so the plan would have recourse (presumably against the bonding company) if under funded at plan term date. Is this a realistic avenue ? Does anyone know of any insurance coverage that would offer such a specialized bond. I've seen some type of IRA-escrow account used in a situation like this, and also a segregated account (within the same plan), but have never pursued the bond option until now. Any thoughts or opinions are appreciated.

[Blinky the 3-eyed Fish]

I looked into 1-2 years ago. I can't remember the specific companies I tried, but most didn't know what I was talking about, though I was able to get one company to give a quote. Unfortunately, because this company considered it an unsecured bond, the rates were too high to purchase it.

My inkling from the whole process was that this option wasn't very feasible.

[JAY21]

Thanks Blinky. I am feeling the same way, that it's not a highly feasible option unless/until some insurance company finds a way to provide this specialized bond at some reasonable prices, which may never happen.

[Guest Gregory]

I've been working on finding an insurer since 5/7/04 and have had the same results Blinky mentioned.