I have searched the boards on this subject, but I haven't found an answer to my client's dilemma. If it has been addressed. I probably did not ask the right question in my search.

Plan has about $1,660,000 in non-qualifying assets. Total plan assets are $2,723,000. Therefore, non-qualifying assets are greater than 50% of total plan assets.

This seems to be the problem for obtaining a bond on the non-qualifying assets. If the non-qualifying assets totaled less than 50% of the total assets, then client could get a bond on the $1,660,000.

Are others finding this to be the standard? Or, are there those of you, out there, who are aware of companies that would issue a bond to a client in this situation.

Thanks.

Back in 2002 I was able (through Travelers) to get a $1.6 million bond for a Plan with total assets of just over $2 million. The $1.6 million was needed to cover the non-qualifying assets. I have not had recent experience with Travelers for this type of coverage.

Lynn - I'm just curious - how did it compare in terms of cost? By that I mean, how much would an accountant have charged to do the audit, as opposed to how much did Travelers charge for a bond this size? I'd be interested to know for background purposes, as clients sometimes ask which is cheaper. To which I have to reply "depends upon the accountant and the bonding company." But I'd be interested to know how it worked out in your case. Thanks!

Lynn,

Thank you for your reply. I will have the client contact a Traverler's agent to see if they might be able to help.

Kate Smith

Belgarath - I have checked my file and the 3-year premium was just over $1,000. I assumed this was cheaper than the audit for even 1 year. Any input would be interesting. Thanks!