[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR2580.412-4]

[Page 586-587]
 
                             TITLE 29--LABOR
 
 CHAPTER XXV--EMPLOYEE BENEFITS SECURITY ADMINISTRATION, DEPARTMENT OF 
                                  LABOR
 
PART 2580_TEMPORARY BONDING RULES--Table of Contents
 
          Subpart A_Criteria for Determining Who Must Be Bonded
 
Sec. 2580.412-4  ``Funds or other property'' of a plan.

    The affirmative requirement for bonding persons falling within the 
definition of administrator, officer or employee is applicable only if 
they handle ``funds or other property'' of the plan concerned. The term 
``funds or other property'' is intended to encompass all property which 
is used or may be used as a source for the payment of benefits to plan 
participants. It does not include permanent assets used in the operation 
of the plan such as land and buildings, furniture and fixtures or office 
and delivery equipment used in the operation of the plan. It does 
include all items in the nature of quick assets,

[[Page 587]]

such as cash, checks and other negotiable instruments, government 
obligations and marketable securities. It also includes all other 
property or items convertible into cash or having a cash value and held 
or acquired for the ultimate purpose of distribution to plan 
participants or beneficiaries. In the case of a plan which has 
investments, this would include all the investments of the plan even 
though not in the nature of quick assets, such as land and buildings, 
mortgages, and securities in closely held corporations. However, in a 
given case, the question of whether a person was ``handling'' such 
``funds or other property'' so as to require bonding would depend on 
whether his relationship to this property was such that there was a risk 
that he, alone or in connivance with others, could cause a loss of such 
``funds or other property'' through fraud or dishonesty.