§8478 Bonding

Summary

People who manage or handle money or property of the Thrift Savings Fund must have a bond. A bond is a promise backed by an insurance company that protects the Fund if someone steals or cheats. Corporations that are allowed to act as trustees or insurers, that are supervised by federal or state authorities, and that have enough capital and surplus (at least $1,000,000 or a higher minimum set by the Secretary of Labor) may not need a bond. There is also a special note about banks or financial firms with trust powers whose deposits are not insured by the FDIC. The Secretary of Labor sets the bond amount each fiscal year. The bond must be at least 10% of the funds handled, and never less than $1,000 or more than $500,000 unless the Secretary, after notice and a hearing, sets a higher amount. The amount can be based on last year’s activity or on an estimate for the current year. Bonds must protect the Fund against fraud or dishonesty, be backed by a corporate surety approved under federal rules (31 U.S.C. 9304–9308), and be in a form the Secretary approves (individual or blanket bonds are allowed). It is illegal to handle Fund money without the required bond or to let someone do those jobs unless they are bonded. People who are bonded under these rules do not have to get other bonds for handling Fund money. The Secretary of Labor will write rules needed to carry out these requirements and may exempt people or groups when appropriate.