MEMORANDUM TO: ALL CLIENTS FROM: LEGAL DEPARTMENT DATE: JULY 18, 2001 RE: NEW REQUIREMENTS ON FIDELITY BONDING FOR QUALIFIED EMPLOYEE BENEFIT PLANS I. BACKGROUND Current regulations under ERISA require generally that all Employee Benefit Plans engage an Independent Qualified Public Accountant ( IQPA) to perform an annual audit of the Plan, and to include that accountant’s report as part of the Plan’s annual report. An exemption to this requirement has been given to small pension plans with less than 100 participants generally, due to the cost of an annual independent audit. Due to recent losses to small plans because of fraud or theft on the part of Plan Fiduciaries, the Department of Labor has come under pressure to take steps to insure that small plans assets are protected. In order to take steps to protect the participants of small plans, while not causing undue costs on small plans, the following ... Read More..