welfare and pension plan bond coverage
Usually added by rider to a fidelity bond, this coverage protects funds and
property in employee (labor-management) welfare and pension plans against loss
by reason of acts of fraud or dishonesty on the part of administrators, officers,
and employees of such plans. Bonding is required to safeguard these funds under
the terms of the Federal Welfare and Pension Plans Disclosure Act. A guideline
of 10 percent of the aggregate amount of funds handled, subject to a $1,000
minimum and a $500,000 maximum, is generally used to establish the required
amount of coverage.
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PLI XII.C