The increase in the broker surety requirement to the new $75,000 level has been on the minds of all in the transportation industry. Pacific Financialhas been working diligently to refine our plans and pricings to fulfill this need and keep the costs as reasonable as possible so everyone can continue to grow their businesses.  We have always had multiple options for our clients to satisfy the broker surety requirement and we are proud to continue to do so.

 

As a current broker, you have displayed the type of responsibility in your freight brokering that has built a bond of trust. We are pleased to be able to offer you any of our new plan types to meet the new federal requirements without any additional qualifications. This is just a small sign of our faith in your moving forward.

 

New Plan Options to Fulfill the $75,000 Requirement

 

Cash Plan

You may elect to place $75,000 cash into your trust held with Pacific Financialwith
no annual administrative fee for the life of your account.

 

Letter of Credit (LOC)

You can arrange with your bank or credit union to issue an Irrevocable Standby Letter of Credit naming Pacific Financialas the beneficiary in the amount of $75,000 or place some funds in trust with the balance backed by an LOC.  If your bank requires the funds to be held with them in a secured instrument, you may find it more cost effective to place the funds directly into the trust withPacific Financial to avoid any annual administrative fee as a “Cash Plan”. (A sample LOC can be provided upon request.)

 

 

Quarterly Payment

 

Annual Payment

$75,000 LOC

$400

or

$1,500

$65,000 LOC & $10,000 in trust

$275

or

$1,000

 

Group Surety

This option was expressly written into the new legislation.  You would operate under your own authority but the liability of the $75,000 surety would be shared with other brokers.  Rest assured, your account would not be adversely affected by the claims of another member as the annual administrative fee includes your contribution for the financial obligation of the group.  As an added benefit within this option, you may decide to add additional funds toward your own dedicated trust fund.  Doing so will assist in offsetting your annual fee as you build up to the Cash Plan.

 

Funds in trust:

Quarterly Payment

 

Annual Payment

$0 – $9,999

$995

or

$3,500

$10,000 – $24,999

$695

or

$2,500

$25,000 – $74,999

$495

or

$1,500

  Again, as a current active broker with Pacific Financial, we are offering you the ability to select any plan type listed above without any additional qualifications.  Currently the Federal Motor Carrier Safety Administration is indicating that they will enact this requirement as of October 1, 2013.  We will be working with you before that time to select your new plan type so that we can update your account and documents accordingly and make this transition as easy as possible.

 As always, we appreciate your trust inPacific Financialand look forward to working together for the years to come.

 Sincerely,

Daniel Larson

President