Effective January 14, 2010, the U.S. Department of Labor (DOL) finalized an ERISA regulation establishing an optional safe harbor period during which participant contributions can be remitted, without becoming “plan assets” in the interim, to employee benefit plans with fewer than 100 participants. The regulation is intended to clarify when such contributions have been timely made to the plan, which in turn relieves plan sponsors of the civil legal obligations attached to holding “plan assets” from (i) the payroll date or other date of receipt to (ii) the date of remittance to the plan. The safe harbor is part of DOL’s ongoing campaign to reduce persistent delinquencies in employee contributions to plans.
With the addition of the optional safe harbor and the commentary in the preamble to the final regulation, the participant contribution regulation (which was originally adopted in 1988 and previously amended in 1997) operates as follows...
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