Best Accountants in Alafaya, FL

A Key employee is any employee that is a more than 5% owner of the company. A key employee may also be an employee with less than 5% ownership but more than 1% ownership and compensation of $150,000 annually. Immediate family of an Owner of the company are also considered Key employees for plan purposes. This includes the spouse, children, and grandparents. Officers of the company with compensation of $175,000 (may change based upon cost of living increases) or more may also be considered Key employees.

The ACP test or Average Contribution Percentage test works the same way as the ADP test (See What is the ADP Test), except that it is measuring the HCEs match percentage compared to the NHCEs match percentage. A failed ACP test can result in refunds of match contributions to the HCEs.

An ERISA fidelity bond is a required bond that must be maintained by the fiduciaries of the plan. The bond is in place to protect the plan assets from fiduciary theft or fraudulent activity. The amount of the bond must be at least equal to ten percent of the funds handled, but not less than $1,000 or more than $500,000.

Although many Fiduciaries think their ERISA mandated fidelity bond protects personal assets, it does not. The fidelity bond protects the plan from loss due to dishonest acts of those who handle plan assets.

Yes, you are required by ERISA to bond or insure your plans from employee dishonesty in the lesser of $500,000 or 10% percent of all plan assets. Fiduciary liability insurance is not required by ERISA. However, a separate insurance policy may be purchased to provide fiduciary insurance coverage. This coverage provides protection to the fiduciary in the instance a participant makes a claim of fiduciary breach and defense is required.