|
Posted by yawnmoth on January 1, 2010, 5:27 pm
I was looking up misc. 401k plans on brightscope.com and had a few
questions about interpreting the data.
http://www.brightscope.com/form-5500/basic-info/43285/International-Business-Machines-Corporation/43863/Ibm-Savings-Plan/
That plan has $32 billion in assets and a fidelity bond of $110
million.
http://www.brightscope.com/form-5500/basic-info/74360/Kosmix-Corp/75505/Kosmix-Corp-401K-Plan/
That plan has almost a million in assets and a fidelity bond of half a
million.
My question is... what is a fidelity bond in this context? If the
IBM 401k went completely insolvent would that mean that they'd split
$110 million up among the 220,000 people enrolled in the plan, or does
it mean that individual plans with up to a $110 million account
balance would reimbursed for that full amount? If the latter that
would seem to suggest that that's a good estimation as to the size of
the largest single account balance (probably the CEO or something).
Also,
http://www.brightscope.com/form-5500/basic-info/235981/Enron-Corporation/239890/Enron-Corp-Savings-Plan/
That plan has zero enrollees, total assets of $3 million, and a
fidelity bond of $10 million. How is that possible?
|
|
Posted by Tad Borek on January 5, 2010, 2:55 pm
yawnmoth wrote:
> My question is... what is a fidelity bond in this context?
Dept of Labor regulations under the law that governs 401k plans (ERISA)
require that certain parties involved w/these plans post a fidelity
bond. Kind of like a bail bond, it's only paid out if something goes
wrong. The amount is based on plan assets, I think it's a minimum of 10%.
I've never seen data on how often these result in any payment to 401k
participants but my hunch is it's extremely rare, based on the pricing
for getting the bonds. They don't cover investment losses, rather
certain abuses of plan assets by the bonded individuals/entities. Think
theft of assets, that kind of thing. I'd put it in the same category as
say SIPC protection on a brokerage account or the &^* premises liability
insurance I have to buy for my office, in case the Fedex guy stubs his
toe on my negligently placed desk.
-Tad
|
| Similar Threads | Posted | | Fidelity 401k Basics | January 31, 2007, 5:03 am |
| Vanguard vs. Fidelity | November 19, 2006, 11:47 am |
| New Fidelity Roth IRA | February 8, 2007, 4:55 am |
| Fidelity Minimums | February 26, 2007, 4:56 am |
| Fund closings at Fidelity | January 26, 2007, 8:57 am |
| Fidelity Versus Schwab? | June 25, 2007, 5:08 am |
| Fidelity Roths for kids | January 12, 2008, 11:54 am |
| uncertain about my Fidelity IRA and the economy | July 24, 2008, 5:11 am |
| Fidelity IRA funds for 2010 | March 6, 2010, 9:01 pm |
| feedback on rolling over a 403b to IRA from Fidelity | April 7, 2007, 6:37 am |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap