Participant Contributions: Timeliness of Remittance

AccountingWeb.com has this article by Dixon Odom: “Timeliness of Remitting Employee Contributions to Retirement Plans.” The article discusses how the Employee Benefits Security Administration (formerly the Pension and Welfare Benefits Administration) a division of the Department of Labor (DOL) is emphasizing its position regarding the timeliness of remittances of participant contributions to employee retirement plans. The article reports that the 2002 Form 5500 (Annual Retirement/Report of Employee Benefit Plan) has a revision to question 4a of Schedule H (large plan filers) and Schedule I (small plan filers) which highlights EBSA’s position. The 2001 Form 5500 asked whether the employer had remitted participant contributions within the maximum time period allowed (i.e. the fifteenth business day). The 2002 Form 5500 asks: Did the employer fail to transmit to the plan any participant contributions within the time described in 29 CFR 2510.3-102? These reg.’s require an employer to segregate employee contributions, including plan loan repayments, from its general assets “as of the earliest date on which such contributions can reasonably be segregated from the employer’s general assets.” The article reports that employers can correct violations of this rule under the DFVC program.