Correction of Late Deposits

[g bennycon]

I hope that someone can help me. I need to correct 11 late deposits and I was reviewing the process. In September 2014 I attended an ASPPA webinar on the topic Late Deposits by Janice Wegesin. In her presentation she said that you have to use the Plan Earnings rate in computing the lost earnings. I knew about the IRS deficiency rate which I believe is the DOL calculator and the Restoration of profits, but the Plan Earnings rate is new. Can anyone tell me where in IRS or EBSA published guidance the use of the Plan Earnings rate is found?

[Lou S.]

Pretty sure it has been in the EPCRS procedures since day one.

Here is a a decent recap of the program from the IRS web site including the differences between DOL/IRS.

http://www.irs.gov/Retirement-Plans/Late-Deposit-of-Salary-Deferrals-Fixing-Common-Plan-Mistakes

[g bennycon]

That is part of my confusion. The link you site is from October 2014. If you go to the IRS site now and search late deposits a new fix it page comes up dated 2015 which states that you can only use EPCRS if you plan provisions expressly state the due date for timely deposit. The violation is failure to follow the plan document. According to this 2015 page if the plan does not have that language you follow the rules applicable to the violation of IRC 4975 prohibited transactions.

[Doghouse]

I always thought this was more of a DOL issue than an IRS one, and that the calculator can be used only if you go through the Voluntary Fiduciary Correction (VFC) Program.

[g bennycon]

Thank you for responding. The DOL calculator is actually the IRC Section 6621 underpayment rates for the periods you are correcting and can be used to determine the amount involved in preparation of a 5330.