The U.S. Department of Labor announced a proposed rule to provide increased protection for employee contributions deposited to pension and welfare-benefits plans for smaller firms.
The proposal provides a safe harbor of seven business days following receipt or withholding by employees at plans with fewer than 100 participants.
“Our proposal will protect workers by encouraging employers to deposit participant contributions to small pension and welfare plans in a timely manner,” said assistant secretary of labor for the Employee Benefits Security Administration Bradford P. Campbell, in a statement.
“It also will provide employers with a higher degree of compliance certainty.”
Under the current rules, employers of all sizes must transmit employee contributions to pension plans no later than the 15th business day of the month following the month in which contributions are received or withheld by the employer. The latest date for forwarding participant contributions to health plans is 90 days from the date on which such amounts are received or withheld by the employer.
The proposed rule would amend the participant contribution rules by creating a safe harbor period under which participant contributions to a small plan will be deemed to be made in compliance with the law if those amounts are deposited with the plan within seven business days of receipt or withholding.
The public may submit comments on the proposed rule electronically through www.regulations.gov or via e-mail to e-ORI@dol.gov.