Timely Deposit Safe Harbor For Small Plans
The Department of Labor finalized regulations that establish a 7-business day “safe harbor period” for employers to deposit participant contributions and loan repayments to small pension and welfare plans (i.e., plans with less than 100 participants). The final regulations do not apply with respect to large plans (i.e., plans with 100 or more participants at the beginning of the plan year). Employers of small plans who make their deposits during the safe harbor period will be treated as having timely contributed those amounts to the Plan.
Plan sponsors are advised to maintain a written record of each participant deposit during the plan year, including the date of the withholding, the date of the deposit and any other relevant information related to the timeliness of each deposit.
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The information contained herein is not necessarily all inclusive, does not constitute legal or any other advice, and should not be relied upon without first consulting with appropriate qualified professionals for your plan’s individual facts and circumstances.
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