[Code of Federal Regulations]
[Title 29, Volume 9]
[Revised as of July 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR2580.412-15]

[Page 602-603]
 
                             TITLE 29--LABOR
 
 CHAPTER XXV--EMPLOYEE BENEFITS SECURITY ADMINISTRATION, DEPARTMENT OF 
                                  LABOR
 
PART 2580_TEMPORARY BONDING RULES--Table of Contents
 
                      Subpart C_Amount of the Bond
 
Sec. 2580.412-15  Procedures to be used for estimating the amount of 

funds to be ``handled'' during the current reporting year in those 
cases where there is no 
          preceding reporting year.

    If for any reason a plan does not have a complete preceding 
reporting year, the amount ``handled'' by persons required to be covered 
by a bond shall be estimated at the beginning of the calendar, policy or 
other fiscal year, as the case may be, which would constitute either the 
operating year or the reporting year of the plan, whichever shall occur 
first, as follows:
    (a) In the case of a plan having a previous experience year, even 
though it has no preceding reporting year, the estimate of the amount to 
be ``handled'' for any person required to be covered shall be based on 
the experience in the previous year by applying the same standards and 
criteria as in a plan which has a preceding reporting year. Similarly, 
where a plan is recently established, but has had, at the time a bond is 
obtained, sufficient experience to reasonably estimate a complete year's 
experience for persons required to be bonded, the amount of funds to be 
``handled'' shall be projected to the complete year on the basis of the 
period in which the plan has had experience, unless, to the knowledge of 
the plan administrator, the given period of experience is so seasonal or 
unrepresentative of the complete year's experience as not to provide a 
reasonable basis for projecting the estimate for the complete year.
    (b) Where a plan does not have any prior experience sufficient to 
allow it to estimate the amount ``handled'' in the manner outlined in 
paragraph (a) of this section, the amount to be ``handled'' by the 
administrators, officers and employees of the plan during the current 
reporting year shall be that amount initially required to fund or set up 
the plan, plus the amount of contributions required to be made under the 
plan formula from any source during the current reporting year. In most 
cases, the amount of contributions will be calculated by multiplying the 
total yearly contribution per participant (required by the plan formula 
from either employers, employees, employer organizations or any other 
source) by the number of participants in the plan at the beginning of 
such reporting year. In cases where the per capita contribution cannot 
readily be determined, such as in the case of certain insured plans 
covered by the Act, the amount of contributions shall be estimated on 
the amount of insurance premiums which are actuarially estimated as 
necessary to support the plan, or on such other actuarially estimated 
basis as may be applicable. In the case of a newly formed profit-sharing 
plan covered by the Act, if the employer establishing the plan has a 
previous year of experience, the amount of contributions required by the 
plan formula shall be estimated on the basis of the profits of the 
previous year. The amount of the bond shall then be fixed at 10 percent 
of this calculation, but not more than $500,000. A bond for such amount 
shall be obtained in any form

[[Page 603]]

the plan desires on all persons who are administrators, officers, or 
employees of the plan and who ``handle'' funds or other property of the 
plan.