Contribution Timing

[Guest bbillik]

A company is working under the Federal Contract subject to the Service Contract

Act, which states that an hourly amount ($2.59) be paid to the employee in

the form of health & welfare benefits for each hour worked. These dollars

are known as the "fringe" dollars. Fringe dollars can be used for either

health and/or retirement.

This company is putting the funds into a self-funded health plan

administered by a TPA (third party administrator). The funds accumulate in

the self funded insurance plan and pay claims as they come in. After the

year is finished, and claims from Nov. & Dec are paid, the plan then takes

the excess funds and puts them into a 401K. This happens sometime in Feb or

Mar.

Is there any ERISA violation here? I was under the impression that dollars

from year needed to be deposited into a 401K within the same year? Is there

any other violation here?

Thanks

Brad