We recently witnessed the DOL's 401K audit priorities first
hand.
In auditing 401K plans, the U.S. Department of Labor previously
focused on determining how quickly employers could deposit employee
deferral contributions into the plan’s trust. For small plans
(fewer than 100 participants), deferral contributions must be
deposited within seven business days from the date they are
withheld from payroll (generally, the payroll date). For large
plans (100 or more participants), DOL rules require employee
deferral contributions to be deposited as soon as it is
“administratively feasible” to separate the
contributions from the employer’s general assets.
What does this mean? In prior audits, the DOL has taken the
position that if the company deposited deferral contributions one
time within one business day and the rest of the time within two
business days, then all deposits should be made within one business
day. Some employers even make the deposit to the trust
before
