Employer Responsibility for Remitting Contributions

[Guest NPalazzolo]

What is the Employer's responsibility for segregating and remitting 403(b) contributions to the recordkeeper? [Also, does anyone know the code / reg under which this is listed?]

What are the penalties if contributions are not timely remitted?

Thanks for your help!!

[MWeddell]

Is the 403(b) plan subject to ERISA?

If the answer is no, then why not? (For example, is it because it's a church plan or is it because it only accepts employees' deferrals.)

The answer to your question depends on those answers.

[Guest Boilerburm1]

Reviving an old post with a similar question that was not answered:

What if it is a Church Plan? What is the answer to the original question in that case?

[Guest mjb]

church plans are exempt from ERISA.

[Guest Boilerburm1]

I know. Does that mean they can hold deferrals for 6 months if they want to?

[Guest mjb]

Under Rev. Rul 67-69 employer can hold them for 1 yr. prop reg. 1.403(b)-8-(b) would require that amounts be remitted "within period that is not longer than reasonable for plan administation. Plan may permit salary reduction contributions to be made to annuity contract within specified period after date amounts would be paid to participant."

[GBurns]

What does the SRA and employer agreement etc say?

What does your state law say about such salary reductions?

[BeckyMiller]

On this point, note the the proposed Form 5500 for 2008 may include a requirement that 403(b) plans subject to ERISA be subject to the financial statement audit, like a 401(k) plan. Thus, when the proposed regulations under Section 403(b) becomes final and if the 2008 reporting rules require an audit, 403(b) plan sponsors will be confronted with all of the same timeliness issues and the scrutiny of those issues.

See http://www.dol.gov/ebsa/compliance_assistance.html#section5 for a discussion of the proposed changes.