Defined Contribution Deposit Rules

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Topic Author
corysold
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Joined: Mon Mar 24, 2014 12:58 pm

Defined Contribution Deposit Rules

Post by corysold » Sun Dec 01, 2019 2:56 pm

I have a DC plan at work which started on September 1st of this year. The first deposit wasn't made until November 13th, which seemed like a long time.

I know 401k are supposed to be deposited by the 15th of the following month, do all DC plans have this same rule? I interpret that as the deposit for September should be made by Oct 15th, correct? I'm going to call the benefits office and would like to know the exact rules when I do. Thanks.

HomeStretch
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Re: Defined Contribution Deposit Rules

Post by HomeStretch » Sun Dec 01, 2019 3:07 pm

Depends on the size of the company. This IRS link may help:
https://www.irs.gov/retirement-plans/40 ... -deferrals

You said the plan started on September 1. What’s important is the date of your employee deferral compared to the date the 401k custodian credited the contribution to your participant account.

krow36
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Location: WA

Re: Defined Contribution Deposit Rules

Post by krow36 » Sun Dec 01, 2019 8:01 pm

I don't know the rules you are looking for, but a 401k is governed by ERISA, while many 403b plans are non-ERISA. Governmental 457 plans are also non-ERISA and could have different rules than non-governmental 457 plans. Can you be more specific on which category of defined contribution plan you have?
Last edited by krow36 on Mon Dec 02, 2019 7:38 pm, edited 1 time in total.

Spirit Rider
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Re: Defined Contribution Deposit Rules

Post by Spirit Rider » Sun Dec 01, 2019 8:55 pm

In addition to the points @krow36 made.

The 15th of the following month is an IRS maximum deadline. The DOL has enforcement responsibility for ERISA. An employer is required to deposit 401k employee deferrals as soon as they can reasonably segregated from the employer's general assets.

An employer with < 100 employees has a seven (7) business day safe harbor. Employers with >= 100 employees should deposit less than 7 business days unless they have reasonable reason.

Topic Author
corysold
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Joined: Mon Mar 24, 2014 12:58 pm

Re: Defined Contribution Deposit Rules

Post by corysold » Sun Dec 01, 2019 9:28 pm

Thanks for the help.

From the summary plan description:

The Supplemental Retirement Savings Plan is a defined contribution plan consisting of a money purchase plan and a profit sharing plan maintained for the purposes of providing retirement benefitsto eligible Participants. This means that the dollar amount of benefits provided is based on the amount of contributions paid on behalf of the Participant, plus Net Investment Income. The exact dollar amount of the
Employer Contribution is determined by collective bargaining between the Union and the Employer.

My only concern was that it seemed like a long time if it was November 13th for my September contributions to be deposited.

My investment options are through John Hancock and I can select between 5 options, from conservative to aggressive portfolios.

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Eagle33
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Re: Defined Contribution Deposit Rules

Post by Eagle33 » Mon Dec 02, 2019 7:17 pm

Ask your local union rep. Make him/her earn the union dues you pay monthly.
Rocket science is not “rocket science” to a rocket scientist, just as personal finance is not “rocket science” to a Boglehead.

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