Lost Earnings is tiny, can it be skipped

[TPApril]

Small plan ultimately had delinquent contributions in 2012 which resulted in a total of $1.25 in Lost Earnings. We will be checking yes on the 5500 but is the Lost Earnings so small that the deposit can be skipped? Less than $1.00 of it goes to non-owners.

[ETA Consulting LLC]

This would be a judgement call. Some would argue that many calculations yield earnings that are negligible in amount, but part of the 'punishment' in late deposits is in performing the calculation and making the earnings adjustment (regardless of the size); and the merely marking no on the Form 5500 would be too convenient. Others would question what DOL auditor in their right mind would challenge a late deposit so small in amount that it yielded such a negligible amount; that there really wasn't any significant harm (or potential for harm) to the plan. This argument may be supported by showing that the event may have been attributed to a one-time oversight that was immediately corrected.

It's just a judgement call. I'd deposit that earnings and report the event before losing any sleep over it, but that's not to say I would actually lose sleep by not reporting it

Good Luck!

[Bird]

I think if you're going to report it you should deposit the earnings. There seems to be a pretty good chance that they are going to at least send a letter inquiring about it, and you want to be able to say "yes we fixed it." If you've done the calcs the worst part is over, right?

[jpod]

Did you use the DOL's lost earnings calculator to calculate lost earnings of $1.25? Was there only one delinquency or were there multiple delinquencies/payrolls? Exactly how many days "late" are we talking about here? I am having difficulty grasping how one could have enough confidence to report a delinquency on the 5500 yet the lost earnings is $1.25.

[TPApril]

I don't have the confidence not to report it. However due to small amount not filing 5330 or VCP.

5 delinquencies from 1 to 25 days late. Deposit has been made, calculated per DOL calculator.

Did you use the DOL's lost earnings calculator to calculate lost earnings of $1.25? Was there only one delinquency or were there multiple delinquencies/payrolls? Exactly how many days "late" are we talking about here? I am having difficulty grasping how one could have enough confidence to report a delinquency on the 5500 yet the lost earnings is $1.25.