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As a non-lawyer, I tend to agree with MoJo in this. I note that in the first paragraph of 2510.3-102, says, (my emphasis) (a)(1) General rule. For purposes of subtitle A and parts 1 and 4 of subtitle B of title I of ERISA and section 4975 of the Internal Revenue Code only (but without any implication for and may not be relied upon to bar criminal prosecutions under 18 U.S.C. 664), the assets of the plan include amounts (other than union dues) that a participant or beneficiary pays to an employer, or amounts that a participant has withheld from his wages by an employer, for contribution or repayment of a participant loan to the plan, as of the earliest date on which such contributions or repayments can reasonably be segregated from the employer's general assets. Now, I don't know what that really means in real life circumstances, but it does seem to indicate that the exemption isn't "blanket" and may only be relied upon for specific purposes. But as I said, I'm not a lawyer, so this is nothing more than useless speculation on my part. It's fun to randomly talk about things I know nothing about, when I can't be held responsible for what I say. I think that qualifies me to run for President.

I like post #5 here: http://benefitslink.com/boards/index.php/topic/45730-employer-not-submitting-payments-withheld-on-my-check/ as a description of when deposits have to be made, that is, there is a 7 day safe harbor for depositing the assets in the Plan, but if deposits can be made in 2 or 3 days, then taking more time than that is too long. And the timing of when the allocations are made by the RK is another matter, which the Plan Administrator should address as a fiduciary responsibility, but not because of the deposit timing safe-harbor.

As pointed out there could be other fiduciary breach risks associated with not allocating promptly, but the pt exposure ends when the employee money is handed over to the plan trustee.

I posted my thoughts on the subject before, at http://benefitslink.com/boards/index.php/topic/56254-late-deposits-dol-safe-harbor/#entry246113 When I was at the DOL, we did not look at the date the contribution was remitted, or even the date the money was received by financial institution, but the date it posted to the trust account. And, we never looked at when the contributions were allocated to the actual participants--just when the contribution posted to the plan's account. There is a difference between when the entity receives the assets and when it was posted to the account--often it is the following day.

I agree, In this case, the client is sending the money to the RK on time but isn't sending the file at the same time. So it is not the RK's fault. But, based on this thread and what I am reading online, it doesn't seem the client violated the 7-day safe-harbor. As such, I am more confident advising them that they can answer No to the question of whether DEPOSITS were late. Thank you.

In my experience, many documents either automatically allow a participant to postpone distributions, or in the Adoption Agreement allow the employer to choose whether or not to require the mandatory forced distribution. The mandatory forced distribution isn't a popular option, (in our plans, anyway) as the people who generally want to delay it the longest seem to be the higher paid owners.