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We were recently made aware of a late contribution issue with one of our clients when the company was purchased and the new owner started submitting their 401(k) deposits. Due to a payroll software issue, deferral and loan payments have been consistently submitted 2 weeks late since 2006. This is a small plan and the deposits have not met the 7-business day safe harbor. After interviewing the sponsor, we have determined it would be very difficult to make the argument that deposits were made as soon as administratively feasible. With a little extra work, the new owner is using the same payroll system and is now submitting deposits timely. No late contributions have been reported on the plan’s 5500s, nor has the sponsor filed 5330s. The new owner wants to correct the late deposit issue and we are trying to provide some guidance/assistance. Obviously, this situation is a candidate for VFCP, but neither we nor the plan sponsor have data prior to 2014. The sponsor may be able to produce individual payroll data for the last couple of years, but we would need to propose some simplifying assumptions given individual payroll data is not available for more than a few years. This would seem reasonable given that deposits have consistently been 2 weeks late for the entire period. The IRS has been open to less than full corrections where data was unavailable in VCP filings we’ve done. We haven’t had to do any VFCPs where a full correction was not possible. We are wondering if the DOL is open to less than full corrections and some simplifying assumptions with VFCP filings. Given these facts, we have a couple of questions for the group: Has anyone used the VFCP when a full correction is not possible because the data no longer exist? Since we don’t have individual payroll information for all years, is the DOL open to using annual deposit information and assumed annual interest rates for calculating interest due on the late deposits? Other insights? Thanks in advance for any insights.

Anyone else find this alarming?! Seriously? What if i'm a small plan sponsor and I've done my own lost earnings calc and deposited to the participant accounts, I've done an amount involved calc and filed and paid excise tax with the Form 5330. Seriously, the DOL is going to come after me for also not filing a VFCP?! ARA article: https://www.napa-net.org/news/technical-competence/regulatory-agencies/ebsa-threats-of-alternative-enforcement-actions-trigger-ara-response/ Letter from the DOL (see the last paragraph in particular): https://www.napa-net.org/wp-content/uploads/letter-from-DOL-4.27.2018-002.pdf ARA letter to DOL: https://www.napa-net.org/wp-content/uploads/18.06.07DOLEnforcementFinal.pdf

Good afternoon to all, Have any of you ever calculated the earnings on a series of slightly late deposits (between a few days and 6 weeks each) for a client and found that some participants are only going to get a very little bit of money? I just had to do this for a school with about 45 participants. While 19 of their 26 deposits during the year were late, they weren't THAT late, and the total interest on the late deposits per person just isn't much. Some will get a few bucks but many will get less than a dollar. Why did I bother with it? Because some of the employees found out that deposits were being made tardy and demanded to know what our client was going to do about it. He's in the unhappy position of having to prove that the rules have been followed to the letter. So he will have to pay us more than the interest and penalties involved to find out what he owes. The toughest part to figure out is what to do when the participant has already terminated employment and been paid out. How does our client manage to pay someone as little as 13 cents after they are gone? Do these tiny payments have to funnel through the platform provider or can the school just write a check to the terminated employees and mail it to them? Your thoughts, ideas and experiences are greatly appreciated, as always.

Corporation has two owners, they are not married. Other than owners, there are no employees. Two late deposits (about 2 weeks late). Is there any leeway? Or are they late, reported on 5500, 5300, etc?