What is the minimum percentage requirement for a Fidelity Bond based on the value of the plan assets?

The minimum percentage requirement for a Fidelity Bond based on the value of plan assets is set at 10%. This requirement is established by the Employee Retirement Income Security Act (ERISA), which mandates that plan fiduciaries must be bonded to protect the plan from losses due to fraud or dishonesty.

The bond must cover at least 10% of the plan assets, up to a maximum of $500,000. For plans that hold employer securities, the bonding requirement increases to 100% of the value of those securities. This percentage ensures that there is a substantial financial safeguard in place to protect the interests of plan participants and beneficiaries from potential fiduciary mismanagement or fraudulent activities. The inadequacy of the other choices lies in the fact that they do not meet the statutory minimum established under ERISA, making them unsupported by current regulatory standards.