Small profit sharing plan bonding

P/OPINION 75-117


                                                               412


                           May 6, 1975


Dear           :

This is in response to your letter of March 18, 1975, in
which you ask the minimum number of employees under a
profit sharing plan before fiduciaries are required to
be bonded under the provisions of the Employee Retirement
Income Security Act of 1974 (Act).

There is no provision in the Act exempting plans with a
minimum number of participants from the bonding requirements
of section 412.

The Secretary has issued a temporary regulation (29 CFR Part
2555) which, pending issuance of a permanent bonding regulation
under section 412 of the Act, incorporates by reference most
of the bonding regulations issued under the Welfare and
Pension Plans Disclosure Act and makes them applicable to
plan officials under the Act.

Pending the issuance of permanent regulations with respect
to section 412 of the Act, a fiduciary is not required to be
bonded unless he handles funds or other property of an employee
benefit plan. "Handling" occurs whenever the duties or
activities of a plan official are such that there is a risk
that such funds or other property could be lost in the
event of fraud or dishonesty on the part of such person,
acting either alone or in collusion with others.

Sincerely,