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DOL Relief for Late Salary Deferral Deposits

deferrals

As a result of the Coronavirus pandemic, I have consistently said that plan sponsors still have their fiduciary duties to fulfill in terms of their sponsorship of the plan and their deposit of salary deferrals as soon as possible.

 

In EBSA Disaster Relief Notice 2020-01, The Department of Labor (DOL) issued guidance that relaxes the timely deposit of 401(k) salary deferrals: “The Department [DOL] recognizes that some employers and service providers may not be able to forward participant payments and withholdings to employee pension benefit plans within prescribed timeframes during the period beginning on March 1, 2020, and ending on the 60th day following the announced end of the National Emergency. So, the DOL won’t take enforcement action regarding a temporary delay in depositing participant salary deferrals to the plan, if the delay is solely because of the Coronavirus pandemic.,\

 

My take is those plan sponsors still should deposit deferrals as soon as possible. If they can’t, as a result solely because of the pandemic, then put a document in place that explains that just in case of a DOL audit later down the line.

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