What requirement does the Employee Retirement Income Security Act (ERISA) impose on fiduciaries of employee benefit plans?

The Employee Retirement Income Security Act (ERISA) establishes certain standards for fiduciaries managing employee benefit plans to ensure they act in the best interests of participants and beneficiaries. One key requirement under ERISA is that fiduciaries must be bonded. This bonding requirement is designed to protect plan assets by requiring that fiduciaries have a bond in place to cover losses due to theft or dishonesty. This safeguard ensures that fiduciaries are held accountable and adds a layer of financial security for the plans they manage.

In contrast, while providing annual financial summaries can be part of ERISA’s reporting and disclosure requirements, it is not specifically a fiduciary duty tied to bonding. Offering health insurance is also not a requirement imposed on fiduciaries but rather a mandate that may be associated with certain benefits offered by employers. A certificate of insurance, while related to insurance practices, does not meet the specific fiduciary standards set forth by ERISA.

Thus, bonding is a core component of fiduciary responsibility under ERISA, reinforcing the importance of protecting the interests of plan participants.