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,
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.
