What type of fidelity bond is needed to meet the audit waiver conditions if more than five percent of its assets are non-qualifying assets?
Persons that handle non-qualifying assets must be covered by a fidelity bond or bonds that meet the requirements of section 412 of ERISA, except that the bond amount must be at least equal to 100% of the value the non-qualifying plan assets the person handles. Persons handling non-qualifying plan assets can rely on normal rules and exemptions under section 412 in complying with the audit waivers enhanced bonding requirement. For example, if the only non-qualifying assets that a person handles are not required to covered under a standard ERISA section 412 bond (e.g., employer and employee contribution receivables described in 29 CFR 2580.412-5) that person would not need to be covered under an enhanced bond for a plan to be eligible for the audit waiver.
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