5 U.S.C. § 8478 — Bonding

(a)(1) Except as (2) allows, every fiduciary and everyone who handles Thrift Savings Fund^* money or property must be bonded, as this section requires.
(2)(A) A fiduciary (or its officers or employees) does not need a bond if that fiduciary: (i) is a corporation organized and doing business under United States or state law; (ii) is authorized under that law to exercise trust powers or run an insurance business; (iii) is supervised or examined by a federal or state authority; and (iv) always has combined capital and surplus above a minimum the Secretary of Labor sets by regulation, of at least $1,000,000.
(B) If a bank or financial institution would otherwise skip bonding under (A), but (ii) it is authorized to exercise trust powers, and (iii) the Federal Deposit Insurance Corporation does not insure its deposits, then it only gets that exception if it meets state bonding requirements the Secretary of Labor determines are at least equivalent to the federal requirements for banks.

(b)(1) The Secretary of Labor prescribes the bond amount at the start of each fiscal year. Except as this paragraph provides otherwise, it must be at least 10 percent of the funds handled. It may never be less than $1,000 or more than $500,000, unless the Secretary, after notice, an opportunity for a hearing for interested parties, and considering the record, prescribes a higher amount.
(2) For setting that bond amount, "funds handled" is determined by the amount handled by the person^*, group, or class (or their predecessor) during the preceding fiscal year, or the amount expected to be handled during the current fiscal year, as estimated under the Secretary of Labor's regulations.

(c) A bond required by (a) must: (1) include terms the Secretary of Labor considers necessary to protect the Fund^* against loss from fraud or dishonesty by the bonded person, alone or working with others; (2) have as surety a corporate surety company acceptable for federal bonds under sections 9304 through 9308 of title 31; and (3) be in a form the Secretary of Labor approves, including individual bonds or blanket bonds covering a group or class.

(d)(1) It is unlawful for anyone covered by (a) to receive, handle, disburse, or otherwise control Fund money or property without being bonded as this section requires.
(2) It is unlawful for a fiduciary, or anyone else with authority to direct that work, to let someone covered by (a) do it without meeting (a)'s requirements.

(e) Anyone required to be bonded under (a) is exempt from any other law that would otherwise require a bond for handling Fund money or property.

(f) The Secretary of Labor must prescribe regulations needed to carry out this section, including exempting a person or class of people from its requirements.