Employers who fail to remit timely participant contributions to a 401(k) plan on their Form 5500 are likely to receive a letter from the Employee Benefits Security Administration regarding the potential use of the Department of Labor's Voluntary Fiduciary Correction program. The letter informs employers that the failure to remit participant contributions, or the untimely remittance of participant contributions, violates ERISA. Such failure can result in significant civil penalties for the employer.
However, it is important that all employers, even those who did not report delinquent contributions, determine whether they have complied with the governing DOL regulations. DOL has made this issue a priority, and it is a common issue for examination on audit.
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