DOL Adopts Safe Harbor for Small Plans on Remitting Participant Contributions

more+
less-

A common question among plan sponsors is when participant contributions (i.e., amounts that a participant or beneficiary pays to an employer or amounts that a participant has withheld from his or her wages by an employer for contribution to certain employee benefit plans) must be deposited into a plan to avoid penalty? Unfortunately, prior regulations adopted an ambiguous “general rule” which provides that participant contributions must be deposited on the earliest date on which they can reasonably be segregated from the employer’s general assets. This general rule does not provide employers and plan advisers with much certainty in resolving this question.

In response to continued requests, the U.S. Department of Labor (“DOL”) published final regulations in January intending to clarify when participant contributions will be considered to have been timely remitted to the plan. The general rule remains the same, but the following provisions of the final regulations do provide additional guidance for employers regarding the application of the general rule.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McAfee & Taft | Attorney Advertising

Written by:

more+
less-

McAfee & Taft on:

JD Supra Readers' Choice 2016 Awards
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
×
Loading...
×
×