Is fidelity bond required?

Having a discussion (nicely put) that the following DC plan needs a fidelity bond - at least I insist on it:

Owner (100%), spouse and 2 adult children.

Am I wrong? On the top of your head, do you have a cite for it?

Thank you

Pretty sure the adult children make the plan subject to Title I and that requires a bond.

Agree with Bill. I would cite DOL reg 2510.3-3(c)(1) which says "An individual and his or her spouse shall not be deemed to be employees" - it says nothing about their children.

I agree with both, just need to convince others.

Thank you both for your input.

Why isn't there attribution under 318? 

18 minutes ago, ASFESQ said:

Why isn't there attribution under 318? 

You would have to ask the authors of Title I. The definition of employee benefit plan does not reference IRC 318 attribution.

But the definition of employee does.  See instructions to 5500 EZ.  Exclusions:  "2 . Covers only one or more partners (or partners and their spouses) in a business partnership (treating 2% shareholder of an S corporation, as defined in IRC §1372(b), as a partner)."  §1372(b) references §318.

See this thread for a discussion of the 5500-EZ issue: 

Short version: the definition applies solely for purposes of determining whether a plan is eligible to file Form 5500-EZ and not for any other purpose under Title I.