A 401(k) tax label does not itself answer a fidelity-bond question. Start by determining whether there is an employee pension benefit plan, whether Title I and Part 4 apply, whether it has funds or other property, and which natural persons handle that property. Section 412 then applies to nonexempt handlers—not automatically to every arrangement called a 401(k). 29 U.S.C. §1002 29 U.S.C. §1003 29 U.S.C. §1101 29 U.S.C. §1112
Use the retirement-plan guide to route other retirement designs and compare their coverage questions.
Start with the facts, not the plan label
- 1Confirm an employee pension benefit plan exists.
- 2Test Title I coverage and then Part 4 applicability.
- 3Identify plan funds or other property.
- 4Identify each natural person whose actual authority creates a risk of loss.
- 5Test any person- or institution-specific exemption.
- 6Only then calculate amount, confirm form, and recheck live surety and filing materials.
Private 401(k) baseline and employee census
A private-employer 401(k) that covers common-law employees can be an employee pension benefit plan subject to Title I; that is a starting point, not a conclusion that every person associated with it needs a bond. IRS descriptions identify traditional, safe-harbor, and SIMPLE 401(k) designs for tax purposes, while §412 turns on the separate federal coverage, property, and handling facts. Internal Revenue Service 29 U.S.C. §1002 FAB 2008-04, Q5–Q8
A plan covering only a sole owner (or owner and spouse), or only partners and their spouses, is excluded from the regulatory definition of employee benefit plan. Adding an eligible common-law employee can change that analysis; “solo” is not enough by itself. The owner-only and solo plan guide applies that employee-census test. 29 C.F.R. §2510.3-3(b)–(c)
A governmental plan or a nonelecting church plan is outside Title I on those facts, so §412 does not apply because Title I does not apply. A church-plan election can change the Title I exclusion; employer names and affiliations are not substitutes for the statutory test. 29 U.S.C. §1002 29 U.S.C. §1003
Property and the people who can cause a loss
Contributions received by the plan or segregated for plan purposes and plan investments can be “funds or other property.” Identify payroll, trustee, committee, and service-provider functions against actual access and final authority rather than titles. 29 C.F.R. Part 2580 FAB 2008-04, Q17–Q21
For employee deferrals and other participant deposits, use the participant contributions guide to separate remittance timing from the property and handling analysis.
“Handling” is a functional, natural-person test: it can include custody, transfer power, disbursement or signature authority, final investment authority, or supervisory responsibility over handling functions. Physical contact alone is not the test, and controls can affect the risk analysis; they are not an independent exemption. 29 C.F.R. §2580.412-6 FAB 2008-04, Q5–Q8 and Q18–Q21 Use the functional handling guide for a role-by-role review.
Safe-harbor and SIMPLE 401(k) design
“Safe harbor” and “SIMPLE 401(k)” identify tax-plan designs; they do not create a §412 exemption. Apply the same factual sequence, including the employee census and each handler’s authority. Internal Revenue Service 29 U.S.C. §1112
Complete the review
If the facts reach §412, calculate protection from the amount each nonexempt handler handled—not automatically from year-end assets—and verify the bond’s form and no-deductible requirement. Confirm the surety against Treasury’s live list and use the instructions for the applicable Form 5500 filing year. 29 U.S.C. §1112 29 C.F.R. §2580.412-11 U.S. Department of the Treasury U.S. Department of Labor, Part VI, line 9d
See the requirements guide for form and surety review and the coverage guide for the calculation method.
For shared, blanket, or scheduled coverage, see the multiple-plans guide to evaluate each plan's available protection. Complete the annual renewal review when handlers, amounts, terms, plans, or reporting facts change.