Fidelity Bond

[401(k)athryn]

While reviewing a plan's 2018 fidelity bond, I see that it is $30,000.  Assets reported on the 5500-SF are $305,000 as of 1/1/2018, which includes $250,000 in assets and a $55,000 employer contribution that was not deposited until 2019.  I could ask the client to increase coverage retroactively to meet the 10% requirement for 2018, but is this necessary if the assets actually invested in the plan were only $250,000?

[RatherBeGolfing]

I wouldnt worry about it.  While the bond is technically low, I really dont see the IRS or DOL giving you a hard time over the bond being $500 short.

[Mike Preston]

3 hours ago, 401(k)athryn said:

While reviewing a plan's 2018 fidelity bond, I see that it is $30,000.  Assets reported on the 5500-SF are $305,000 as of 1/1/2018, which includes $250,000 in assets and a $55,000 employer contribution that was not deposited until 2019.  I could ask the client to increase coverage retroactively to meet the 10% requirement for 2018, but is this necessary if the assets actually invested in the plan were only $250,000?

Does the policy have an auto escalator? 

[imchipbrown]

Retroactive insurance?  Wish they made that!  Look for a policy with auto-escalation.  A client of mine just got one through Paychex.  Bond was issued by Zurich American Insurance Company.   Coverage $60K, premium $183 for three years of coverage.
 

[Gilmore]

Colonial Surety will issue a retroactive bond if coverage was lacking in a prior year(s).  

[RatherBeGolfing]

12 hours ago, Gilmore said:

Colonial Surety will issue a retroactive bond if coverage was lacking in a prior year(s).  

And their people are awesome.  Highly recommend them.

[401(k)athryn]

On 7/3/2019 at 8:16 AM, RatherBeGolfing said:

I wouldnt worry about it.  While the bond is technically low, I really dont see the IRS or DOL giving you a hard time over the bond being $500 short.

Golfer - I like your attitude.

This client has coverage through Colonial Surety, but did not opt for the auto-escalation.  I agree that Colonial Surety's people are fantastic!  We often takeover plans that have insufficient or NO fidelity bond coverage (even after many years) and have them get the retroactive bond through Colonial Surety.