Late Deposit Safe Harbor Timing vs 5500 Audit

[Leopurrd-401k]

Hi! I'm hoping that I can get some experts to weigh in here. I'm excited about the new process for determining if a plan is subject to an audit starting with the 2023 plan year - it's now looking at participants with a balance - yay! However, it leads me to wonder if the definition for large vs small plans will be extended to the DOL safe harbor regarding timing of employee contributions for small plans. I looked at the federal register and it doesn't specifically link to 5500 status, it only states "100 or more participants". 

What are your thoughts on this? I'm thinking that unfortunately, we are going to have a larger difference of small vs large now between the SH rule and the 5500 filing than in the past [since 100 ppt filers did not have to file a large 5500 until they hit 120]. Thank you!

[Paul I]

The draft instructions for the 2023 form indicate that the 80-120 rule remains in effect and for 2023 will be based on the 1/1/2023 count of participants with account balances.

[Peter Gulia]

About promptness for participant contributions (and participant loan repayments), the 29 C.F.R. § 2510.3-102(a)(2) deemed-reasonable “safe harbor” is for “a plan with fewer than 100 participants at the beginning of the plan year[.]”

https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-B/part-2510/section-2510.3-102#p-2510.3-102(a)(2)(i)

Changing that rule would require a notice-and-comment rulemaking.