---
title: "Fidelity Bonds FAQs"
date: 2014-09-08
author: "Site Admin"
categories:
  - name: "Uncategorized"
    url: "/category/uncategorized.md"
---

# Fidelity Bonds FAQs

#### [![](http://pinnacle-plan.com/wp-content/uploads/2014/09/Fidelity-Bond-Thumbs-Up.jpg)](http://pinnacle-plan.com/wp-content/uploads/2014/09/Fidelity-Bond-Thumbs-Up.jpg)

#### What is a fidelity bond?

A fidelity bond is a type of insurance contract required by the Department of Labor for 401(k) plans, profit sharing plans, defined benefit plans and some 403(b) plans. The purpose of a fidelity bond is to protect the assets in employee benefit plans from risk of loss due to fraud or dishonesty by the individuals who handle the plan assets.

#### What types of retirement plans require a fidelity bond?

All retirement plans require a fidelity bond except for single participant plans, plans sponsored by most churches or church-controlled entities, plans sponsored by government entities, and certain 403(b) plans that qualify for an ERISA exemption.

#### How is the amount of the fidelity bond determined?

The minimum fidelity bond required is the greater of $1,000 or 10% of the value of plan assets on the first day of the plan year. The maximum required is generally $500,000. If the plan invests in non-qualifying assets, such as real estate, non-publicly traded securities, or the stock of the company sponsoring the plan, the maximum fidelity bond amount increases to $1 million.

If more than five percent of the plan assets are invested in non-qualifying assets, the minimum fidelity bond amount becomes the greater of 10% of the value of the qualified plan assets, 100% of the value of the non-qualifying assets, or $1,000.

#### How does one purchase a fidelity bond?

Most insurance agents can assist with securing a fidelity bond; however, only certain insurance companies are permitted to issue them.