ERISA bonding for plan with less than 10 participants

[Gary]

Say we have a db plan (i suppose a 401k plan applies to) with 5 active participants (1 owner and 4 common law employees).

Situation 1

If 95% or more of plan assets are qualified assets than no IQPA audit required.

However, my undersatanding is that an ERISA bond for 10% of assets is required (assume less than 500k) and s/b renewed or increased each year.

So if at then end of 2008 plan assets were 100k the fiduciary ahndling the money would obtain coverage for 10k.

And if at end of 2009 assets are 150k the fiduciary would increase bond to 15k.

My understanding is that one of the approved surety companies can assist with the details and implementation.

Is this understanding correct?

Situation 2

Say a plan has 200k in assets and invests 100k of such assets in private real estate and the other 100k is invested in qualified plan assets.

Once again the ERISA requirement is to purchase a bond for 20k coverage.

However, the plan would be required to engage an IQPA.

Alternatively, if a bond for 100k was purchased than the plan would not be required to engage an IQPA.

Is this understanding correct?

Specifically a plan sponsor is purchasing a pension investment in a private company for $1,000,000. So my understanding is that a bond for $1 million is necessary to avoid the audit requirement.

Is that correct?

If an IQPA is required does anyone have suggestions as to where to go for this assistance?

Thank you.