3% employer safe harbor contribution - late or not late?

[Guest Michael Anderson]

Company A provides a 3% Safe Harbor contribution to all eligible employees. They send this in on a quarterly basis. They sent in for the third quarter in early October. One of their employees became eligible on 9-1-03 and was not included in the money sent in for the 3rd quarter in Oct. They now realize this error and are sending in the money for the missed participant. Are there any rules to indicate that the employer needs to make up interest or pay a fine as with EE deferrals??? Any insight would be appreciated. (The EE is not an HCE or Key). Thanks!

[pmacduff]

I think I read in the safe harbor info that if you choose quarterly calculations & deposits for your safe harbor, then the deposits must be made no later than the end of the next quarter. For example, safe harbor for the period 07/01/2003 - 9/30/2003 must be deposited no later than December 31, 2003. So my vote is that you still have time and would not need to make any type of correction for the missed participant as long as you make the deposit within this quarter. Definately no fine and any made up interest would just be goodwill by the Employer since everyone else's contribution was made in October. How much are we talking about???

[Guest Michael Anderson]

We are not talking much money (about $200). Thanks for the information!