Does DOL have jurisdiction over SIMPLE IRAs?

[Flyboyjohn]

Disgruntled employee reports employer to DOL for late deposit of what employee thinks are 401k deferrals but are actually SIMPLE IRA deferrals.

DOL is seeking explanations, if we prove to them it's a SIMPLE IRA do they lose jurisdiction and go away?

[Kevin C]

I doubt the DOL will go away. I don't see a reference to SIMPLE IRA in the deposit regs, but the preamble to the final regs published 8/7/1996 specifically says it applies to salary reduction contributions in a SARSEP. I can't see deferrals in a SIMPLE IRA being any different.

d. Special Rule for Simplified Employee Pensions

Two commenters stated that the proposed rule was particularly inappropriate as applied to simplified employee pensions that allow participants to elect salary reduction contributions. Although such plans are available only to employers with less than 26 employees, the commenters maintained that many sponsors of SEPs would be semi-weekly depositors. According to these comments, some SEPs allow participants to designate their own custodians and the sponsor must make separate payments to the custodian for each participant's account. The comments state that the amount deferred for a given pay period is often very small, and may well be less than the minimum deposit amount permitted by the custodian. One of these commenters recommended that, for SEPs, the time period should be 15 days from the earlier of (1) any pay period in which the largest single accumulated participant contribution exceeded $1,000, (2) the earliest date on which the total of all accumulated participant contributions exceeded $5,000, or (3) two months from the last contribution.

The Department has determined not to create a special rule for SEPs. The great majority of commenters, including third party fiduciaries, stated that it is important to have a single rule for all employers. The final rule would permit sponsors of SEPs to remit participant contributions as infrequently as once a month, if necessary. This should allow the remission of amounts sufficiently large to be accepted by custodians of SEPs

http://benefitslink.com/src/erisaregs/403.html#.VG-5cvldXRM