What is the maximum required bond amount generally set at?

The maximum required bond amount for a fiduciary under the Employee Retirement Income Security Act (ERISA) is generally set at $500,000. This bonding requirement is intended to protect the plan's assets in the event that a fiduciary misappropriates the funds or fails to act in accordance with the plan's rules or legal obligations.

The requirement for fidelity bonds is designed to ensure that administrators and fiduciaries are held accountable for their actions and to provide a layer of security for plan participants and beneficiaries against potential losses due to fraud or dishonesty. The $500,000 threshold applies to most plans, although there are exceptions for plans that hold publicly-traded securities, which can have a lower bonding requirement of $1,000,000.

This substantial bond amount underscores the importance of fiduciary responsibility in managing retirement plans, ensuring that those in control of the plan assets are financially accountable for their management.