Timing of 401(k) employee contribution deposits
The Department of Labor recently announced a proposed rule affecting the timing of 401k deferral deposits within small plans (fewer than 100 participants).
Following is an excerpt from the Announcement: "The Department will not assess a violation of ERISA where such contributions are deposited within seven business days following withholding by the employer".
Formerly, 401k contributions had to be deposited as soon as administratively feasible, but no later than the 15th of the month following the month in which contributions were withheld.
EGTRRA Document Restatement
Perhaps you have already heard that the IRS requires that all qualified plan documents be 'restated' by April 2010. The restatement process is much more involved than an amendment, whereby the entire document must be updated and re-signed. We want to assure all our clients that we will provide you with signature-ready documents in a very timely manner.
EGTRRA stands for Economic Growth and Tax Relief Reconciliation Act of 2001. Your plan has been operating in compliance with EGTRRA since 2001 and we don't anticipate that the design or operation of the plan will change.
We value our ongoing relationship and we'll provide you with more information specific to your individual plan in the next several months. Please contact your PDS Plan Manager if you have any immediate questions.
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