one person plans subject to DOL's 7-day deferral deposit rule?

[Pinefresh]

One person plans (in this case, for a S-corp) are not subject to parts of ERISA. Are they covered by the seven business day safe harbor for depositing 401(k) deferrals? Thx!

[John Feldt ERPA CPC QPA]

If the one person is the 100% owner (including spousal attribution), then you are correct that they are not subject to ERISA and thus the 7-business day ERISA deposit timing rule does not apply. However, check the terms of the plan document to see if it states a requirement regardless. The plan still must operate according to its terms. I have seen some that have built in the 15-business days after the end of the month as a "no later than" requirement.

[rcline46]

S-Corp pays on a W-2, and so the deferral must come out of the paycheck. Why is there any delay in depositing?