Late deposits fixed by using old trade date?

[AlbanyConsultant]

I have a client who made their final deposit for 2016 (payroll date 12/30/16) and first deposit for 2017 (payroll date 1/13/17) were not processed by the recordkeeper for several weeks; it wasn't discovered for another month or two.  To make good, the recordkeeper reversed the initial transactions and re-processed them as of the date they should have been done, using that dates' share prices (I wonder if the relative share prices made it come up a net positive or negative for the rk?).

 

So... I presume that this gets us out of having to calculate any lost earnings (presuming that the rk also made sure to correctly credit any dividends or capital gains)?  And how in the world do I begin looking at a 5330?  Any suggestions?

[Belgarath]

If I understand correctly, employer submitted the funds timely, and RK did not process, but has corrected it, presumably including earnings. I would not do a 5330 in this situation.

[CuseFan]

agreed, if the funds were timely segregated from employer assets and deposited - the timing of investment/trade is another matter and one which was apparently corrected so that participants were not harmed.

[Belgarath]

P.S. - nor would I report this on the 5500 as a delinquent contribution.

[ESOP Guy]

Let's be clear this was NEVER a late deposit subject to the late deposit rules.  The rules are clear the money has to be segregated from the employer's assets in a timely manner.  These rules are silent on HOW FAST THE MONEY IS INVESTED.  So this was never subject to a filing of a Form 5330 as there was no loan between the plan and the sponsor which is the PT at the heart of the deposit timing rules. 

Now there is a fiduciary duty to investment the funds timely and it sounds like that may have been violated and corrected. 

 

[AlbanyConsultant]

Sounds reasonable - I was going right past the 'segregated' issue.  Thanks!