Fidelity coverage for plans
outside ERISA — voluntary by design.
For top-hat deferred compensation, church plans, governmental 457(b), and excess-benefit arrangements. ERISA doesn\'t mandate bonding for these plans — but plan documents, state law, and fiduciary prudence often do. Premium approx. $100–$300 per $100K annually.
- Top-hat & deferred compensation plans
- Church plans (non-electing under IRC §414(e))
- Governmental 457(b) and public pension plans
Voluntary fidelity coverage for plans outside ERISA scope.
A non-qualified plan bond is a fidelity bond that covers theft, forgery, embezzlement, or dishonesty by those who handle funds of retirement or deferred-compensation plans that are NOT subject to ERISA\'s mandatory bonding requirement. These plans include top-hat deferred comp, non-electing church plans, governmental plans, and excess-benefit arrangements.
Because the §412 ERISA bonding mandate doesn\'t apply, coverage is a voluntary choice — but one that plan documents, trust agreements, state law, or sound fiduciary practice may effectively require. The bond protects plan assets from insider dishonesty the same way an ERISA bond protects qualified-plan assets.
Coverage limits are set by the plan sponsor rather than by statute. Industry practice borrows from ERISA\'s 10% rule — 10% of funds handled — as a reasonable floor.
Straightforward pricing by coverage amount.
Non-qualified plan bonds are priced similarly to ERISA bonds — a simple rate per $1,000 of coverage for clean applications. Larger plans and higher-risk insider environments underwrite individually.
| Coverage amount | Typical annual premium | Typical plan size |
|---|---|---|
| $100,000 | $125–$200 | Small top-hat / small church plan |
| $250,000 | $250–$400 | Mid-size deferred comp |
| $500,000 | $500–$1,200 | Executive plan / mid church |
| $1,000,000+ | $1,000–$2,500+ | Governmental / large institutional |
Rates apply to single-location, clean-loss-history plans. Multi-location or prior-claim situations underwrite individually.
Three steps — simpler than an ERISA application.
- 01
Plan summary
Provide plan type (top-hat, church, governmental, excess-benefit), funds handled, number of covered fiduciaries, and recent financial statement.
- 02
Coverage selection
We recommend a limit based on the 10%-of-assets-handled floor and your plan document\'s requirements. You select the final amount.
- 03
Bond issued
Bond executed and delivered same-week. Certificate provided for board minutes and plan audit file.
Why these plans escape the ERISA mandate.
Unfunded deferred compensation for a select group of management or highly-compensated employees. ERISA §201(2) exempts from participation and funding rules; §4(b)(4) exempts from fiduciary and bonding rules.
IRC §414(e) plans established and maintained by a church for its employees. Non-electing church plans (the default) are exempt from ERISA Title I entirely — no §412 bonding mandate.
Federal, state, or local government retirement systems (including Texas public retirement systems like TRS, ERS, HPOPS, HFRF). ERISA §3(32) exempts.
Plans providing benefits above IRC §415 limits. ERISA §4(b)(5) exempts unfunded excess-benefit plans from Title I.
Plan documents, trust agreements, Texas Property Code trust bonding requirements (§113.058), and board/audit committee policies frequently require fidelity coverage even when ERISA doesn\'t.
Plan-specific underwriting, not a boilerplate ERISA quote.
Plan-type aware
We\'ve written top-hat, church, and governmental bonds — the forms, limits, and riders differ meaningfully from standard ERISA.
Board-ready certificates
Delivered with the language your audit committee or trustees need for minutes and plan audit file.
Same-week turnaround
Standard non-qualified bonds issue within days — not weeks — for clean applications.
Other retirement-plan and fidelity coverage options.
Non-qualified plan bond questions from Texas plan sponsors.
What is a non-qualified plan bond?
A non-qualified plan bond is a fidelity bond covering theft or dishonesty by those handling funds of retirement and deferred-compensation plans that are NOT covered by ERISA — including top-hat plans for executives, non-electing church plans, governmental 457(b) plans, and certain deferred compensation arrangements. Because ERISA does not mandate bonding for these plans, the coverage is voluntary — chosen by the plan sponsor as sound fiduciary practice.
Which plans are NOT covered by ERISA?
ERISA exempts: (1) governmental plans (federal, state, city, county retirement systems), (2) non-electing church plans under IRC §414(e), (3) top-hat plans — unfunded deferred compensation for a select group of management or highly-compensated employees, and (4) excess-benefit plans. These plans do not trigger the mandatory ERISA §412 fidelity bond, but the sponsor often carries coverage voluntarily to manage fiduciary exposure.
If ERISA doesn't require it, why buy the bond?
Three reasons: (1) plan documents or trust agreements may require fidelity coverage, (2) state law (for governmental plans) may impose bonding duties on trustees and administrators, and (3) plan fiduciaries remain personally liable under common-law and trust principles — a bond transfers that risk to an insurer. Audit committees and plan sponsors routinely require coverage even when ERISA does not.
How much coverage is appropriate?
There is no federal minimum for non-qualified plans. Industry practice borrows from ERISA's 10% rule as a floor — 10% of funds handled, commonly capped at $500,000 or $1,000,000 depending on plan assets. Larger governmental retirement systems often carry $1M–$10M in coverage based on actuarial exposure and insider-fraud risk.
How much does the bond cost?
Non-qualified plan bonds are priced similarly to ERISA bonds — roughly $100–$300 per $100,000 of coverage for standard applications with clean history. A $500,000 bond typically runs $500–$1,200 annually. Governmental plans may price higher if public-employee exposure is unique.
Are church plans required to be bonded in Texas?
Non-electing church plans are exempt from ERISA, so federal bonding rules don't apply. Some denominations require fidelity coverage via their plan documents, and Texas Property Code trust provisions may indirectly require bonding for trustees handling plan assets. We work with church plan sponsors and denominational benefits boards on tailored coverage.
How long does underwriting take?
Same-week for most non-qualified plans. Application, plan document summary, and latest financials are typically sufficient. Larger governmental retirement systems (over $100M in assets) may require a longer underwriting cycle — 2–3 weeks — due to the specialized exposure review.
Quote your non-qualified plan bond today.
Top-hat, church, governmental, or excess-benefit. Board-ready certificates.