29 CFR Part 2510 RIN 1210–AB02 DOL Proposed Regulation – Amendment of Regulation Relating to Definition of ''Plan Assets'' Participant Contributions The DOL announced a proposed regulation providing a safe harbor rule for employee contributions to small plans:
Washington – The U.S. Department of Labor today announced a proposed rule to provide greater protection for employee contributions deposited to pension and welfare benefit plans with fewer than 100 participants by proposing a safe harbor period of seven business days following receipt or withholding by employers.
"Our proposal will protect workers by encouraging employers to deposit participant contributions to small pension and welfare plans in a timely manner," said Assistant Secretary of Labor for the Employee Benefits Security Administration Bradford P. Campbell. "It also will provide employers with a higher degree of compliance certainty."
Under the, employers of all sizes current rules must transmit employee contributions to pension plans as soon as they can reasonably be segregated from the general assets of the employer, but no later than the 15th business day of the month following the month in which contributions are received or withheld by the employer. The latest date for forwarding participant contributions to health plans is 90 days from the date on which such amounts are received or withheld by the employer.
The proposed rule would amend the participant contribution rules by creating a safe harbor period under which participant contributions to a small plan will be deemed to be made in compliance with the law if those amounts are deposited with the plan within seven business days of receipt or withholding.
Before the effective date of the final regulation, the department will not assert a violation of the Employee Retirement Income Security Act regarding participant contributions where such contributions are deposited with small plans within the seven business day safe harbor period.
In addition, the department requests information and data regarding a possible safe harbor for plans with 100 or more participants to enable it to evaluate the current contribution practices of these large employers.
The public may submit comments on the proposed rule electronically through www.regulations.gov or via e-mail to e-ORI@dol.gov. Comments on paper should be sent to the Office of Regulations and Interpretations, Employee Benefits Security Administration, Room N-5655, 200 Constitution Avenue, N.W., Washington, D.C. 20210, Attention: Participant Contribution Regulation Safe Harbor. The proposal is to be published in the February 29 edition of the Federal Register.
Contribution Timing and Collection Responsibility, a Q&A
- What are the current Department of Labor (DOL) rules regarding an employer depositing employee 401k deferrals?
- I heard there is some sort of 15-day rule. What's this about?
- What is the DOL trying to accomplish now?
- What will be the rule going forward?
- You said it is "not the rule yet." What does that mean?
- Was there anything else in this proposed amendment besides the timing of employee contributions?
- What about plans that have more than 100 participants-does this safe harbor apply to them?
- Is there an economic benefit to this proposed seven business-day safe harbor?
- What's happening with collection responsibility?
- When are contributions late?
- What does it mean when contributions are late?
- What must a plan sponsor do to fulfill its responsibility?
- What if the fiduciary has not assigned responsibility?
- What about plans such as a SIMPLE IRA or SEP IRA that have no trustee?
- What happens when one trustee, who has no direct responsibility for collecting contributions, knows that contributions are delinquent?
- So what's the bottom line?
Related Links:
- News Release
- DOL Proposed Regulation – Amendment of Regulation Relating to Definition of ‘‘Plan Assets’’ Participant Contributions [HTML]
- DOL Proposed Regulation – Amendment of Regulation Relating to Definition of ‘‘Plan Assets’’ Participant Contributions [PDF]
- Labor Regulation 2510.3-102 Definition of “plan assets”—participant contributions
- Fiduciary Convicted of Filing False IRS Form 5500
- Delinquent Contributions and a 7-Business Day Safe Harbor
- U.S. Department Of Labor Proposes A Safe Harbor For Deposits To Small Plans
- Contribution Timing and Collection Responsibility, a Q&A
- Department of Labor Issues Guidance on Compliance for Wellness Programs and Safe Harbor for Deposit of Employee Contributions
- ASPPA: Comments on Proposed Regulations Relating to Definition of “Plan Assets” – Participant Contributions
- American Benefits Council/ICI: Participant Contribution Regulation Safe Harbor
- DOL Proposes Safe Harbor for Deposit of Small Plan Contributions and Clarification for All Plans
- Participant Contributions Are 'Plan Assets' After 7 Business Days
- Deferral Deposit Deadline
- TCRS 2008-01: Department Of Labor Proposed Amendment To Plan Asset Regulation
- Department of Labor Proposes “7-Business Day Safe Harbor” for Depositing Contributions to Small ERISA Plans
- Proposed regs would provide 7-day safe harbor for contributions to small plans
- Are Participant Contributions Remitted Quickly Enough? Proposed Safe Harbor for Small Plans and Implications for Large Plans
- 7-day Safe Harbor for Depositing Participant Contributions
- DOL’s Proposed 7-Day Safe Harbor for Employee Contributions May Affect FAB 2008-01
- Legal Alert: DOL Proposes Small Plan Safe Harbor for Remitting Participant Contributions to Plan
- A Potentially Dangerous 'Safe Harbor'
- Department of Labor proposes safe harbor rule for deposit of employee 401(k) contributions...finally
- EBSA Proposes Seven-Day Employee Contrib Safe Harbor
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