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Calculating Missed Earnings for Late Deposits
BenefitsLink Message BoardsLink to more items from this source
Aug. 5, 2021

"Absent a plan document provision requiring elective deferrals to be deposited within x days of the payroll date, the late deposit of deferrals is not an operational failure and therefore does not fall within the guidelines of EPCRS. The late deposit is a presumptive prohibited transaction (loan to the employer) and fiduciary breach. Corrective action requires payment of an excise tax of 15% of the 'amount involved' which is based on the value of the use of the funds or the disgorgement of profits. What authority is there that the IRS method(s) of calculating missed earnings contained in EPCRS should apply to late deposits?"

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