Question of the Month

Question: What are the ERISA Bonding Requirements for our 401k plan?

Answer:   The Employee Retirement Income Security Act (ERISA) provides that all plan Trustees who "handle" the plan funds or other property must be bonded.  A fidelity must be obtained at the start of each reporting year from a surety insurance company in the amount of at least 10% of the amount of the plan funds handled from the previous reporting year ($1,000 minimum and no deductible).  It must provide for a discovery period of one year.  A blanket bond, either multiple-penalty or aggregate penalty, is acceptable.    If you invest in certain types of so-called "Non-qualifying Assets" such as real estate, limited partnerships, or other non-marketable securities and items not regularly traded on an established market, your bonding requirement may be increased or an an audit may be required. 

Past Questions of the Month

Question: Can mileage for trips to the doctor be reimbursed from my FSA/HRA/HSA? 

Answer: Yes. You are eligible to be reimbursed for mileage expenses incurred for a medical reason. The standard rate for 2008 is $0.19 / mile, down 1 cent from 2007. For more information, see the IRS Revenue Procedure 2007-70, available at: http://www.irs.gov/pub/irs-drop/rp-07-70.pdf