7 day safe harbor rule for deposits

[WCC]

I am preparing for a conversation with a DOL investigator and am looking for thoughts. Plan receives the DOL late deposit letter discussed in a thread a few weeks ago. The letter states we noticed you have late deposits..... you can file via VFCP..... go this class in your area.....

The contributions in question were all deposited within 7 business days. The company who prepared the 5500 shows them as late. The plan is a small plan filer with a beginning participant count of 115.

Here is the question. Federal Register Vol. 75, published January 14, 2010 says the 7 day rule can only be used for plans with less than 100 participants. I could not find any reference to the 80/120 rule in that register. The EOB also says the rule can only be used for plans with less than 100 participants. I assume the 80/120 rule cannot be used or the F.R. would have said so. I always thought of this as a small plan rule, but I think I am wrong??

Thoughts?

Thank you

[RatherBeGolfing]

For purposes of the final rule, which established the 7 day safe harbor, a small plan is a plan with fewer than 100 participants at the beginning of the year. The 80/120 rule does not apply. A plan with a BY count of 115 would not be able to use the safe harbor, even though it may still file as a small plan for the 5500.

Were the deposits made right around the 7 days mark or were they made at varying times before 7 days (2,3,4,5 days)?

On limited information, it sounds like the 5500 was prepared correctly.

[Kevin C]

Another slightly different angle:

How are they sending the funds and what are they using as the deposit date? The preamble to the final regs has a footnote with a mailbox rule of sorts. For deposits that are mailed, the deposit date is the date they were mailed as long as the check clears.

If that doesn't help, you might want to read through that preamble. It contains some interesting comments regarding monthly deposits that might be helpful. I haven't had to deal with this issue since the 7 day safe harbor was established, but prior to that I had favorable results after providing copies of the preamble (with applicable sections highlighted) to DOL investigators.

http://www.dol.gov/e...al/96_19791.pdf