Broker Check

“Timely” Deposit of Participant Contributions

| March 27, 2024

What is considered “timely” for participant contributions to be removed from payroll and sent to their directed investments? The DOL guidance indicates no later than the 15th of the month following the current pay date.

This issue is nearly always on an investigator’s checklist, but the DOL’s guidance is a bit vague to be comforting, as guidance also states to remove and send remittances “ soon as reasonably possible”.

One safeguard is to set up a trust account (removed from company account) and remit contributions within 3-4 days of pay date. Timing of remittances should not vary significantly without reasonable justification.

Remember that late remittances require inclusion of any interest or losses due to late transmittal.

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