Employee deferral remittance time limt

[Guest cpamichael]

public charity 501©(3) with a 403(b):

Are employee deferrals subject to the ERISA 29 CFR § 2510.3-102 time limit on deposits (sooner of reasonable segregation or 15th of following month)?

Does it make a difference if the plan has or does not have employer contributions (assuming the former is ERISA exempt and the latter is ERISA subject)?

Michael Smith

[MWeddell]

If the 403(b) arrangement is subject to ERISA, then it is subject to the plan asset regulation regarding when deferrals must be deposited. Nothing in your post indicates that it is a church or government plan so that if employer contributions are made then yes the 403(b) arrangement will be subject to that regulation.

Note that in an especially eggregious situation where deferrals are deposited very late, then the employer might be considered as obtaining an economic benefit from the deferrals and this might be used to show that it falls outside of the regulatory safe harbor for non-ERISA 403(b) arrangements. I've never seen the argument made in practice but it seems possible in an extreme case.