Good contact # at DOL? (ERISA bonding question)

[IhrtERISA]

Greetings,

Does anyone have a good contact at the DOL that they could share?

I have been looking into the question of when ERISA bonding is required under Section 412 with respect to a TPA that collects premiums from plan sponsor and remit to the carrier. My feeling is that these monies are not "plan funds" that trigger the bonding requirement until they are in the hands of the carrier, and thus the TPA does not need to have an ERISA bond in place.

Any information, whether it be a contact # or experience relating to the above issue, would be most appreciated.

[401_noob]

Does Q&A 5 from the DOL's Field Assistance Bulletin 2008-04 help:

Q5: Who must be bonded?

Every person who “handles funds or other property” of an employee benefit plan within the meaning of 29 C.F.R. § 2580.412-6 (i.e., a plan official) is required to be bonded unless covered under one of the exemptions in section 412 for certain banks, insurance companies, and registered brokers and dealers, or by one of the regulatory exemptions granted by the Department in its regulations. [see Exemptions From The Bonding Requirements, Q12 through Q15, Funds Or Other Property, Q17, and Handling Funds Or Other Property, Q18 through Q21.] Plan officials will usually include the plan administrator and those officers and employees of the plan or plan sponsor who handle plan funds by virtue of their duties relating to the receipt, safekeeping and disbursement of funds. Plan officials may also include other persons, such as service providers, whose duties and functions involve access to plan funds or decision-making authority that can give rise to a risk of loss through fraud or dishonesty. Where a plan administrator, service provider, or other plan official is an entity, such as a corporation or association, ERISA’s bonding requirements apply to the natural persons who perform “handling” functions on behalf of the entity. See 29 C.F.R. § 2550.412-1©, § 2580.412-3 and § 2580.412-6.

[IhrtERISA]

Thanks 401_noob. I've read theis Field Assistance Bulletin backwards and forwards

My inquiry touches on the aspect of the "monies" being collected from the employer group by the TPA (into its general account) and then remitted to the carrier, who is providing the benefit. My poisition is that these monies are not plan funds being "handlked" by the TPA and thus requiring ERISA bonding. It is not until they are received by the insurance carrier (in essence, the "plan") that they become plan assets whose handling requires bonding.

Anyone else have any experience on this matter?

[jpod]

No direct experience, but aren't there DOL Advisory Opinions that address when (if ever) welfare plan premiums are plan assets?

[hr for me]

Can I ask a question from the other perspective? Why would you not want to be bonded if you are accepting client funds that truly belong to carrier? I would think that any prudent client would be wanting you to be bonded if you have access to the $s between them and the carrier (i.e. goes into your general account).

I would say if the money is going from the client to the TPA to the carrier for any reason, you are handling the funds and they could be stolen, etc. Do you have other insurance that would cover the loss?