In the year 2010, on January 14th Department of labor issued full and final regulations for a safe harbor period of employers to put participant contributions on a regular and timely basis. According to this final regulation, all the contributions of the participants for payroll withholdings to a welfare benefit and a pension plan were started to be given a treatment as having been remitted in a timely manner whenever contributions are deposited to plan no latest than seventh working day after the day on which the amounts were withheld by employer.
The point to be noted was that the issued guidance just applies to the small plan filers i.e. ordinarily all those plans that are under 100 participants. As it is said that common sense can tell us that it is very difficult argument for a larger filer to have such kind of policy that are able to remit contributions in such a fashion that at least can meet the guidance provided. At the present, the general rules and regulations have been that the remittance must be on the earliest date on such types of all contributions which are reasonably be segregated out from the employers’ general assets.
This is also important to note that Department of Labor takes the position that in any instance if you can do it once, you are able to do it again. This means that they look at your performance history to determine your capability to reasonably segregate all these assets by the earliest date of your remittance. If half of the duration, you remit contributions to the trust of the similar business day that you run your payroll and the other half of that time you remit within just a few working days; they are determined that all the remittances that aren’t on the payroll date will be prohibited for the transactions. In accordance, it is also important that you have to maintain a remittance policy in written and are applying the policy on consistent basis.
If you can believe that your plan might not be according to the given guidance, Department of Labor offers a way of bringing your plan into compliance back. This is called Voluntary Correction Program and to qualify for this program, you need to act before you plan is under DOL or IRS inquiries. If your question is that whether your plan is complied with or if you like to correct your current plan policies, you can call and talk today to consultants at Goldleaf common remitter to get help to get in accordance to fulfill your fiduciary responsibilities.