§8478 Bonding

Summary

Requires anyone who handles or cares for Thrift Savings Fund money to have a bond. A bond may not be needed if the person or organization managing the money is a corporation set up under U.S. or State law, allowed to act as a trust or do insurance business, is supervised by federal or state authorities, and always keeps combined capital and surplus above a minimum the Secretary of Labor sets (that minimum cannot be less than $1,000,000). The law also has a special rule about banks or financial institutions that would otherwise be exempt, that are allowed to exercise trust powers, and whose deposits are not insured by the FDIC. The Secretary of Labor sets bond amounts at the start of each fiscal year. Normally the bond must be at least 10 percent of the funds handled, and no less than $1,000 or more than $500,000, unless the Secretary, after notice and a hearing, sets a higher amount. The amount of funds handled is measured by past or estimated current-year amounts under rules the Secretary makes. Bonds must protect the Fund against fraud or dishonesty, use a corporate surety approved for federal bonds (see 31 U.S.C. 9304–9308), and be in a form the Secretary approves (individual or blanket). It is illegal to handle Fund money without the required bond, and supervisors cannot let others handle it unless they are bonded. People bonded under this rule are exempt from other bonding laws for handling Fund money. The Secretary must write regulations and may exempt persons or groups from these rules.