Timing of deposits for employer with multiple payrolls.

[Guest MES]

What are the rules for timeliness of deposits of deferrals when an employer has multiple payrolls? For some employers, with weekly, bi-weekly and monthly payrolls, contributions may be coming in all the time. Some service providers record-keeping fees discourage sending in contributions that frequently. Has anyone heard the DOL's opinion on this?

[Guest PAUL DUGAN]

I can't give you a cite but from every thing I have heard from DOL reps a various meetings the timing is based on the time it is withheld from the individual EE. Sorry I know that is not the answer you wanted.

[KJohnson]

You may want to look at DOL Reg 2510.3-102. Sections (f)(2) and f(3) deal with employers with multiple payroll centers.

I have dealt with this issue for a multiemployer 401(k) Plan where checks and payroll reports came in at all times of the month. My read is that the DOL plan asset regs only require segregation from the employer's assets into the trust. When those segregated amounts are applied to a participant's account is probably a general fiduciary question rather than a plan asset reg question. The solution that we used was to have all employer checks deposited into an interest bearing checking account in the trust's name. Then, once a month amounts were allocated to participants accounts when the recordkeeper verified employer reports against contributions submitted. The written agreement with the recordkeeper was that the "float" on the checking account would be used as partial payment for the recordkeeper's fee.