Late 401(k) Deposits

[Jilliandiz]

Client didn't deposit 401(k) deferrals for 5 months into the trust....what actions do I need to take? Do I need to file with DFVC Program? Pay the interest that would have accrued? And pay the $750 to the DFVC???

Any thoughts?

[Belgarath]

It's very easy to get the alphabet soup mixed up on these. I think what you really want is VFCP, not DFVC (DFVC is for late filing of 5500 forms.)

Here's a link to the VFCP program. If you scroll to the bottom of the page, you'll find additional links on the revised VFCP program that should answer all of your questions. And they provide a very nice on-line calculator as well. Pretty user friendly.

http://www.dol.gov/ebsa/compliance_assistance.html#section8

[Guest abrandw]

Also remember that you have a prohibited transaction. Plan sponsor using plan assets for its own benefit. Prohibited transaction tax is based not on the amount of the late contributions, but rather on the interest or investment return that would have been earned by the contributions.